Digital video advertising is increasingly being used for brand building, with marketers across categories from retail to FMCG to financial services prioritising the format.
Indeed, IAB UK and PwC’s half-year digital adspend update demonstrates that digital video is in large part responsible for the resilience of digital ad spend over the past six moths despite wider volatility in the ad market.
Investment in digital advertising overall recorded total growth of 5% despite inflation. Meanwhile, spend on video ads specifically attracted the strongest growth at 11% year on year. Digital video is now 25% of the total market, and 61% of Display spend.
That ad spend is following user consumption habits. Ofcom’s Media Nations report shows over a third of UK adults watch short-form online videos daily, rising to 68% of 15- to 24-year-olds.
Coca-Cola confirmed yesterday, for example, it now spends more than 60% of its total media spend on digital channels, up from 30% in 2019, as it looks to reach Gen Z consumers.
The rise in consumption of digital channels among younger consumers tracks with the increased visibility of short-form video on platforms including TikTok, Snapchat and YouTube.
YouTube in particular has made Shorts a bigger part of its pitch to advertisers since the format’s launch in 2022, announcing in March this year that it is offering Shorts as part of wider video reach campaigns.
Jon Mew, IAB UK’s CEO, says the increased prominence of video ads is lending stability to the wider digital advertising market: “Advertisers are increasingly harnessing the creative power of digital channels to bring campaigns to life and deliver long-term results, and we see this reflected in robust video investment.”
Due to the overall increase in spend, the UK’s digital ad market attracted £13.8bn of investment in the first six months of 2023.
Digital brand building
The IAB data suggests marketers’ increasing use of digital channels for brand-building is evidence-led. In June, the vast majority (86.7%) of the more than 1,300 brand-side marketers who responded to Marketing Week’s second annual Language of Effectiveness survey stated that digital channels are an effective tool for brand building. That compares favourably with the 80.1% of respondents who said offline media is effective for building brands.
This shift in approach to digital – historically seen as a driver of short-term success – could be attributed to the ease of measuring effectiveness online. Nearly three-quarters (71.8%) of the marketers surveyed for the Language of Effectiveness study believe it is easy to measure the effectiveness of a digital campaign, while only 38.1% of respondents said the same for offline campaigns.
Tom Roach, VP of brand strategy and media agency Jellyfish, explained at the time mobile video is the driver of much brand building. “Video is to brand building what water is to life on earth. More video content means more attention, more emotional impact, and sometimes a more personal and attentive viewing experience than on bigger, more public screens.”
That is backed up by the IAB/PwC report, which finds spend on mobile ads grew by 9% with non-mobile formats remaining flat.
However, some marketers also believe the rise of ad-supported video-on-demand platforms is skewing the perception of digital video’s effectiveness. Amplified Intelligence’s Professor Karen Nelson-Field, for example, told Marketing Week earlier this year that ads need at least 2.5 seconds of attention to begin building the necessary memory structures for brand building.
However, some short-form video ads reach and surpass that time as a result of best practice for producing ads for specific platforms. The latest edition of The Works effectiveness found that a Facebook-specific video ad with captions could attract and retain attention for four seconds, for example.
Meanwhile, NatWest’s group head of social media marketing Robert Anderson told Marketing Week it is using short-form video on TikTok to build brand in addition to driving conversions. “You can use these channels to shift proper brand metrics… in a really positive way and in the way that you would see through traditional TV or other forms of advertising.”
Despite the growing prominence of digital video search ads continued to attract the lion’s share of advertising investment, accounting for 50% of the total market. The category grew 5% year on year, attracting nearly £7bn across the first six months of 2023. It is recognition that digital is capable of supporting both short- and long-term marketing strategies.