How Video Advertising evolved into Video Monetization

The only thing that is certain in life is change.
In the context of the ad tech industry, evolvements in technology have pushed the boundaries of content creation and consumption to limits we have never seen before. In fact, even when faced with a global pandemic, the industry stayed afloat and thrived!

With the way content delivery, content discovery, and user behavior are evolving, the future of video monetization looks pretty promising, primarily thanks to two driving forces;

Digital channels continue to be key engagement drivers with consumers, and video continues to grow as the most popular online communication method, both for content and advertising. In fact, both sides of the ecosystem- advertisers and publishers have come to rely very heavily on it.

On the publisher side

• Between 2016 and 2020, the number of publishers using video content has risen from 61% to 85%.
• More than 80% of digital media professionals claim that video is one of their top revenue drivers.
• Users are watching about 100 minutes of video every day in 2021, a 19% increase from 2019, and the consumption rate will only continue growing.

On the advertising side

• Programmatic video ad spend is pacing towards 40 billion US Dollars in 2021 from just 23 billion US Dollars in 2018.
• According to Verizon Media, 96% of advertisers invested in at least one video format in 2020.
• Two-thirds of the advertisers using video said it offers higher returns than other ad formats.

What the Data says
A Deloitte report on the future of video publishing and implications on monetization models put it together quite neatly, referring to consumer-product brands.

“In the mid-1990s, consumer products companies like Procter & Gamble built their brands with the families who were arguing over the TV remote. They engaged ad agencies to identify target markets, build storyboards, run focus groups, finalize copy, and purchase spots with national and local broadcast networks.

Today, these same consumer products companies develop customer profiles and advertising campaign content in-house, purchase inventory programmatically to target specific consumers, and measure campaign results with deep data-driven insights from publishers.”

What the Future holds
The presence of video and its dominance is definitely being felt across the board. Video ads are everywhere today, from the games we play on our smartphones to the song videos or do-it-yourself clips we watch on YouTube.
In YouTube’s case, utilizing video for monetization has become so crucial that in addition to serving video ads in pre-roll and mid-roll formats to support their free platform operations or encourage users to subscribe to the ad-free premium platform, they even launched a full-screen vertical video experience on mobile devices.

At the rate at which brands adopt video and video monetization solutions, we won’t be surprised if Tesla will one day launch free vehicle charging stations supported by revenue generated from video advertising.

From a format perspective, instream video ads have already become the most popular format, being used by 68% of brands. By 2030, we expect them to be used by almost all advertisers out there.

Short video content (30 seconds or so) is also becoming quite popular. We expect to see publishers working with video monetization partners to take on more unique products and solutions that will enable them to maximize monetization while abiding by the industry’s guidelines and best practices. Ad Vidazoo, we created the perfect product for this trend.

From a user perspective, 44% find the ads that are served to them are irrelevant to their wants and needs. That’s a clear indication of user data’s importance, which we see becoming a vital pillar in the future of video monetization.

To summarize

Video monetization is already an exciting space, to begin with. Though the field is highly dependent and subjected to a wide array of factors that are controlled by large organizations that dictate the rules of play, we can’t help but appreciate the growth it has made over the years.
One thing remains true today and will be valid even in 2030; Working with a robust, resourceful, and attentive partner is crucial for publishers to navigate this ocean safely, effectively, and profitably.

If you have questions on video monetization or would like to upgrade from your current setup, reach out to our experts here. We will be happy to understand your requirements and guide you.