US_Advertising_Report_2013

BrightRoll US Video Advertising Report: April 2013 | www.brightroll.com | 415.677.9222 | 343 Sansome Street, Suite 600, San Francisco, CA 94104 | Copyright ©2013 BrightRoll, Inc.
US VIDEO ADVERTISING: FIRMLY ROOTED AND GROWING
DIGITAL
VIDEO 2013

BrightRoll US Video Advertising Report: April 2013 | brightroll.com | 415.677.9222 | 343 Sansome Street, Suite 600, San Francisco, CA 94104 | Copyright ©2013 BrightRoll, Inc. | P2
‘‘
‘‘
This year’s survey validates that video is an established leader
in digital advertising with proven effectiveness, clearer success metrics
to measure ROI and continued technological advancements
to meet advertisers’ campaign goals.
- Tod Sacerdoti, CEO & Founder
I N T R O D U C T I O N
Digital video: firmly rooted and growing
Video has emerged from the shadow of digital media options and planted
itself in the center of the advertising ecosystem. Adoption is widespread
as digital video continues to make technological advancements that prove
its effectiveness across a wide range of verticals and advertiser objectives.
No longer do brands consider digital the Wild West and an unknown
territory. They now realize video can complement TV advertising and
expand their reach to an even greater audience across screens –
computers, smartphones, tablets and connected TVs.
Overall US ad spending is expected to rise 3 percent in 20131
while the
digital video ad category is projected to increase 41 percent2
. As BrightRoll
presents the fifth annual video advertising report, it’s becoming
abundantly clear that it is no longer a question of if, but when a majority
of advertisers will adopt video at a much more substantial level into
their digital advertising budgets.
This year’s report is based on survey responses from more than 150
executives at top advertising agencies across the US. It reveals key trends
and significant changes in the digital advertising industry. Video and TV
are considered less competitive and more complementary ad media while
programmatic buying is catching the attention of advertisers and playing
an increasing role in media buying this year. Marketers are continuing
to expand to multichannel campaigns and targeting and measurement
are now even more important when considering the bottom line.

T R E N D I N G
Video in the driver's seat
Video is securely in the driver’s seat as it leads the digital advertising category
in overall growth. From 2012 to 2013, video saw the greatest increase in spending
among all US digital ad formats and is expected to reach $4.14 billion by the end
of the year2
. Nearly half (45 percent) of survey respondents say clients consider
targeting the most valuable aspect of video advertising. This is followed by reach
(27 percent), continuing a similar trend from last year.
1. Which aspect of video advertising do your clients view as most valuable?
Interestingly, price relative to TV is still considered the third most important aspect
of video advertising (at a distant 10 percent), yet most advertisers find video to
be just as effective as TV. In fact, three in four respondents find video advertising
equally or more effective than TV, a 17 percent increase from last year. An
overwhelming 91 percent of respondents find video to be equally or more effective
than display, a response that has grown rapidly year-over-year. This illustrates that
advertisers are no longer comparing the effectiveness of digital and TV media,
but rather the categories of advertising that offer the sight, sound and motion of
video, no matter the screen.
2. Compared to the following channels, is video equally or more effective?
When asked what is the most limiting factor to the growth of video, a third
of respondents state price is too high, although this is a significant drop of 15
percent from 2012. Fewer planning and measurement barriers, greater reach and
proven effectiveness have enabled advertisers to embrace video but at the same
time they still need to be sure of its ROI, especially when coupled with
TV in advertising strategies.
Reach
Price relative to TV
Ad unit format
Targeting capabilities
Ability to reuse creative
Other
0%
10%
20%
30%
40%
50%
Reach Price FormatTargeting Creative reuseOther
Reach
Price relative to TV
Ad unit format
Targeting capabilities
Ability to reuse creative
Other
0%
10%
20%
30%
40%
50%
Reach Price FormatTargeting Creative reuseOther
more less
TVDisplay
75%91%
Social media
68%
Search
52%
Direct response
45% No
I don’t know
Yes

G R O W T H
Video: no looking back
Since 2010, a steadily increasing amount of digital RFPs include a video ad
component. Two out of three survey respondents indicate that half or more of their
RFPs had video in 2012 – up 35 percent since the question was first asked in 2010.
3. What % of your digital RFPs included a video ad component in 2012?
Since more advertisers are including video in their digital RFPs, it’s no surprise
they also expect to see the largest increases in spending for online and mobile
video categories, followed closely behind by mobile display. User adoption of
smartphones has driven the industry to follow consumers to where they are
increasingly engaged. US mobile ad spending is expected to increase 83 percent
for mobile display and 112 percent for mobile video in 20132
. On the other side
of the spectrum, TV and connected TV are two categories expected to see the
smallest increase in spending in 2013.
4. Which advertising categories do you expect to see the highest and lowest
growth in media spending this year?
2012 was touted as the year of connected TV3
. However, as industry standards are
a frequent topic of discussion, consumer adoption is progressing slowly. Nearly a
quarter of all US households currently have and use Internet-connected TV, yet only
17 percent of consumers used it at least monthly by the end of 20124
. As a result,
it’s likely that advertisers are waiting to see how the technology and consumer
adoption develop before allocating more significant ad dollars to the device.
0% 20% 40% 60% 80%
2010
2012
0% 20% 40% 60% 80%
Less than half of RFPs (0-39%)Around half or more of RFPs (40-100%)
2012
2010
35%
33%
‘‘
‘‘The doors
are open for
the growth
of video
advertising
today.
- Survey respondent’s fill-in
answer to the question,
“What factor is most
limiting to the growth of
video advertising today?
ConnectedTV|Directresponse|Mobiledisplay|Mobilevideo|Onlinedisplay|Onlinevideo|Searchadvertising|Socialmedia|TVCategories include:
17%
23%
25%
15%
25%
32%
Mobile video
Online video
Mobile display
Connected TV
Direct response
TV
HIGHEST GROWTH
(% of respondents)
LOWEST GROWTH
(% of respondents)

TA R G E T I N G A N D M E A S U R E M E N T
A numbers game
While targeting is considered the most important aspect of video advertising,
behavioral is deemed the most valuable form of targeting according to 36 percent
of respondents. Nearly a third of survey respondents say that lifestyle is the type
of behavioral targeting they expect to use most. This might be attributed to
advertisers’ level of comfort with this broad form of behavioral targeting since
they have used it for many years in TV and print advertising. The technology now
allows advertisers to use this more advanced targeting method for video across
screens and ad media, whether it is TV, print or digital.
5. What type of behavioral targeting do you expect to use the most in your
video advertising in 2013?
When asked what form of audience measurement clients value most for video
advertising, respondents indicate that GRPs/TRPs are most important, a 46
percent lift from 2012. This could be attributed to agencies no longer
questioning if video is effective for campaigns and rather asking how video can
complement TV buys. With GRP planning and measurement, advertisers can ensure
their ads reach the appropriate target audience and desired number of viewers.
6. When it comes to audience measurement, which metric do your clients value
most for video advertising?
TV targeting
In-market
Purchase-based
0%
5%
10%
15%
20%
25%
30%
35% Lifestyle
Look alike / spend alike
TV targeting
In-market
Purchase-based
0%
5%
10%
15%
20%
25%
30%
35% Lifestyle
Look alike / spend alike
%0
5%
10%
15%
20%
25%
30%
35%
40%
2012 2013 2012 2013 2012 2013 2012 2013 2012 2013
% unique viewers in target % impressions in target GRPs or TRPs I’m not sure Other
%0
5%
10%
15%
20%
25%
30%
35%
40%
2012 2013 2012 2013 2012 2013 2012 2013 2012 2013
% unique viewers in target % impressions in target GRPs or TRPs I’m not sure Other

The calculation is straightforward and in line with TV GRPs. Does this mean that TV GRPs and
online GRPs can be added together and then used for cross-platform delivery? Download the
BrightRoll iGRP white paper to learn more about these calculations at brightroll.com/reports
I N S I G H T
Not all metrics are created equal
There are many options when it comes to success metrics for video campaigns.
According to this year’s survey, completed views are again the most important
metric – a 42 percent increase from last year. At the bottom of the ranking is GRP,
accounting for only five percent of responses. This may be due to the industry
idea that views, when used as a success metric, are complementary to GRP as an
audience measurement tool. GRP enables advertisers to plan their potential reach
to target audiences while views measure the engagement of target audiences
with video ads. It’s a notable dynamic as advertisers buy more on a CPV (cost per
view) basis than before5
.
7. What is the most important success metric for your video campaign?
CTR GRPViews Brand lift Sales impact Conversion
0%
5%
10%
15%
20%
25%
30%
35%
40%
Following the birth of TV and the adoption of TV ratings, GRP soon became the common currency
for media planning and reporting. Online video is often compared to TV commercials leading to a
growing demand to apply online GRP (a.k.a. iGRP) to new media. However, there is a fundamental
challenge: Unlike TV, there is no rating for online content, so how is online GRP calculated?
iGRP
UNIVERSE
IMPRESSIONS
*Unique viewers exposed to video ad
FREQUENCY
IMPRESSIONS
UVs
UVs*
UNIVERSE
100X
Traditional GRP: iGRP:
iGRP BUILDS ON THE BASIC MODEL OF REACH X FREQUENCY
100X

Video
Advertising
I N S I G H T
Ready for research
Search the web for “video advertising research” and dozens of results will offer
best-practice presentations, studies and articles that seek to answer a marketer’s
need to effectively measure campaigns. Since first asking advertisers three years
ago the areas of research they would like additional research, the responses have
shifted dramatically.
This year, the two leading areas are the impact of video on offline purchase behavior
(32 percent) and the translation of GRP to online video buying (23 percent). (This
high ranking of GRP translation underscores the lead response that GRPs/TRPs
are deemed by advertisers as the most important audience measurement.) Also
important to note this year is the selection of the least important area of research:
the performance of video compared with TV advertising, down 59 percent from
when the question was first asked in 2011. This may illustrate that advertisers are
less concerned with the performance of video versus similar media, but are more
interested in how video can increase ROI.
8. In which area of video advertising would you most like to see additional research?
0%
5%
10%
15%
20%
25%
30%
35%
Impact on offline purchase behavior Change in purchase intent or brand lift Online performance vs television advertising
Translation of GRP to online video buying Audience proﬁling Brand effectiveness
2011 2013 2011 2013 2011 2013 2011 2013 2011 2013 2011 2013
Offline impact Purchase intent Performance GRP Brand effectivenessAudience proﬁles

L O O K I N G A H E A D
Predictions for programmatic
Spending for real-time bidding (RTB) for digital advertising in the US is expected
to increase 71 percent in 20136
and survey responses support this prediction. More
than a third of survey respondents say that around half or more their budgets will
likely be programmatic in the next 12 months. As brands and agencies look for
more effective planning and measurement tools, it is likely they also need a more
efficient solution to identify and reach target audiences at scale.
9. What percent of your overall digital budget do you expect to be programmatic
in the next 12 months?
As advertisers migrate to programmatic buying to maximize efficiency, they
are focused on opportunities of this solution that offer the greatest campaign
benefits. According to respondents, pricing efficiency (34 percent) is considered
the top benefit for programmatic buying of digital advertising, which is not a
surprise as media costs are always at the forefront of advertisers’ minds. This
is followed by targeting (27 percent), optimization (16 percent) and audience
efficiency (12 percent). With the forecast for tremendous growth of RTB and
programmatic solutions this year, it will be interesting to watch how these
benefits may shift or if specific efficiencies rise to the top as the market matures.
10. In your opinion, what are the key benefits to programmatic buying for
digital advertising?
Small minority (0-19%)
Minority (20-39%)
Around half (40-59%)
Majority (60-79%)
0%
10%
20%
30%
40%
50%
Large majority (80-100%)
(0-19%) (20-39%) (40-59%) (60-79%) (80-100%)
Categories include:
16%
27%
34%
Programmatic Buying
Key Benefits
Universal frequency capping
Pricing efficiency
Targeting
Optimization
Audience efficiency
Time savings
12%
The practice of
automating the
buying of online
ads by using
algorithms to drive
the best possible
price for each
impression. This
occurs in real time,
on demand and on
an impression-by-
impression basis.
- Goldman Sachs
WHAT I S
P RO G R A M M ATI C
B U Y I N G?
Small minority (0-19%)
Minority (20-39%)
Around half (40-59%)
Majority (60-79%)
0%
10%
20%
30%
40%
50%
Large majority (80-100%)
(0-19%) (20-39%) (40-59%) (60-79%) (80-100%)
Categories include:
16%
27%
34%
Programmatic Buying
Key Benefits
Pricing efficiency
Targeting
Optimization
Audience efficiency
Time savings
12%
Categories include:
16%
27%
34%
Programmatic Buying
Key Benefits
Pricing efficiency
Targeting
Optimization
Audience efficiency
Time savings
12%

Greater efficiency
E D U C AT I O N
Efficiency prophecy
With the growth of programmatic buying for video and the proliferation of
publishers, ad networks, demand side platforms and exchanges, it’s no surprise
brands and agencies are increasingly questioning how to best create efficiencies
across all of their campaigns. To address this, some buyers are considering
single platform solutions.
Moving to a single platform for video promises to provide efficiency to streamline
processes and maximize ROI by delivering one point of contact for inventory, ad
serving, targeting, optimization and unified reporting across screens. In support
of this, 43 percent of survey respondents say they are somewhat likely or likely to
consolidate all or a portion of their budget to a single platform, while 46
percent indicate they are unlikely to do so. This may be attributed to a a need for
further education about the benefits of using any particular platform for all or a
majority of an advertiser’s video buying.
11. How likely are you to consolidate all or a large portion of your digital ad
spending on one platform?
Unlikely
Somewhat likely
Likely
I don’t know
0%
10%
20%
30%
40%
50% Unlikely
Somewhat likely
Likely
I don’t know
0%
10%
20%
30%
40%
50%

C O N C L U S I O N
Fast times in digital video
The digital ecosystem is rapidly changing with video leading the way. The
number of video ads served from 2012 to 2013 increased 64 percent7
. This
trend won’t likely slow down as more brands and agencies are embracing
digital video and realizing how it enhances digital advertising strategies
and bottom lines.
Technological innovations in digital video are rapidly advancing planning,
targeting and measurement capabilities. These have the benefit of not
only arming advertisers with more effective tools, but also enabling video
to be the greatest category of growth in digital advertising2
. According
to respondents, video has proven its effectiveness and has been found
in other studies to be viewed as more complementary to TV advertising.
Video ads can actually increase the efficacy of TV spots: 29 percent of
viewers who were exposed to both online video and TV ads recalled the
message versus 19 percent that viewed the TV ads alone, a 53 percent
increase in message performance8
.
While the conversation about video and TV has shifted, the value found
in advanced targeting, especially behavioral, and the importance of
audience measurement through views still remains a big priority to
advertisers. They seek to better understand GRP to more accurately plan
their digital campaigns, while views help them measure campaign success
through audience engagement. As digital video advertising solutions
continue to evolve, programmatic buying is at the forefront of helping
advertisers save time and money. The value of single platform media
buying solutions will be a key trend to watch over the next 12 months to
see how they gain traction and become more prevalent in the industry.
Eighty-five percent of the US Internet audience viewed online video in
March 2013 and video ads accounted for 25 percent of all videos viewed9
.
It’s clear video has staying power and can have a major impact when
incorporated into a larger advertising strategy. Brands and agencies are
taking advantage of the benefits video offers but are still eager for further
innovation and advancement to continue to achieve campaign goals
and drive ROI.
‘‘
‘‘Programmatic
buying is at
the forefront of
helping advertisers
save time
and money.

G R A P H S & C H A R T S
1. Which aspect of video advertising do your clients view as most valuable? P3
2. Compared to the following channels, is video equally or more effective? P3
3. What % of your digital RFPs included a video ad component in 2012? P4
4. Which advertising categories do you expect to see the highest and lowest growth in media spending this year? P4
5. What type of behavioral targeting do you expect to use the most in your video advertising in 2013? P5
6. When it comes to audience measurement, which metric do your clients value most for video advertising? P5
7. What is the most important success metric for your video campaign? P6
8. In which area of video advertising would you most like to see additional research? P7
9. What percent of your overall digital budget do you expect to be programmatic in the next 12 months? P8
10. In your opinion, what are the key benefits to programmatic buying for digital advertising? P8
11. How likely are you to consolidate all or a large portion of your digital ad spending on one platform? P9
C I T I N G & S O U R C E S
1 eMarketer: https://www.emarketer.com/coverage/advertisingmarketing.aspx
2 eMarketer: http://www.slideshare.net/eMarketerInc/emarketer-webinar-trends-in-video-advertising-and-measurement-16163295
3 Reel SEO: http://www.reelseo.com/ces-2012-connected-tv-advertising-begins/
4 eMarketer: http://www.emarketer.com/Article/Connected-TVs-Reach-One-Four-Homes/1009581
5 IAB/Break Media Digital Video Advertising Trends: 2012: http://www.iab.net/media/file/BreakMediaDigitalVideoStudy2012.pdf
6 Forrester Consulting: RTB Powers The Rapid Growth Of Online Video: http://www.spotxchange.com/images/documents/reports/
SpotXchange-RTB-Powers-the-Rapid-Growth-Of-Online-Video-Forrester-TLP-April-2013.pdf
7 comScore Video Metrix Key Measures, Jan. 2012 – Jan 2013
8 Nielsen/IAG Microsoft Advertising Video Effectiveness Research Report: http://www.iabcanada.com/wp-content/uploads/2011/09/
NielsenIAG_MicrosoftAdvertising_VideoEffectivenessReport_2011.pdf
9 comScore Video Metrix Key Measures, March 2013
A B O U T B R I G H T R O L L
BrightRoll is the largest independent video advertising platform for reaching audiences across web, mobile and connected TV.
The company powers digital video advertising for the world’s largest brands including 90 percent of the top 50 US advertisers
and 17 of the top 20 advertising technology companies. The platform enables advertisers to reach 4 in 5 video viewers online and
consistently ranks among the top two video ad platforms in ads served. As a result, BrightRoll technology collects and analyzes
hundreds of billions of data points monthly enabling real-time decisions that drive ROI for advertisers.
The estimates and projections contained in this report are those of BrightRoll, Inc. as of the date of this report and are subject to change without notice. BrightRoll
endeavors to ensure that the contents have been compiled or derived from sources that BrightRoll believes are reliable and contain information and data that are accurate
and complete. However, BrightRoll makes no representation or warranty, express or implied, in respect thereof, takes no responsibility for any errors and omissions
contained herein and accepts no liability whatsoever for any loss arising from any use of, or reliance on, this report or its contents.

US_Advertising_Report_2013

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