The Rise, Fall and Resurrection of Video Advertising

The Rise, Fall and Resurrection of Video Advertising
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In 2017, in line with the shift in consumer attention, many publishers invested heavily in online video advertising. The famously dubbed “pivot to video” saw Huffington Post, Vocativ, MTV News and Fox Sports lay off content writers in favour of video content producers.

Another driver of this change was the higher CPMs commanded by video ads compared to traditional static formats. According to eMarketer , the average cost per thousand impressions (CPM), or, is a little more than $20 for video ads worldwide. Advertisers responded to the increase in availability of video ad placements that could be bought through programmatic platforms.

By 2019, eMarketer estimates that 77% of all US digital video ad spend is expected to be transacted through programmatic channels – a substantial increase on the 39% share programmatic video had in 2015. Despite the increase in supply and demand, the “pivot to video” was short-lived. Mashable sold at one-fifth its one-time valuation of $250 million to Ziff Davis, and both BuzzFeed and Vice missed their annual revenue targets.

What went wrong? Despite the investments made in video content production, the level of inventory deemed as premium and desirable by advertisers remained stable, creating a market in which supply outweighs demand. Furthermore, adopting a quality video-centric strategy requires significant investments in technology and manpower, a difficult task for publishers already struggling with revenue. This strategy failed as it became clear that the increase in ad revenue was not going to cover the upfront investment and many publishers […]

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