Internet Ad Spend to Eclipse TV in 6 Months, Finds Meeker Report

The marketing world has been buzzing this week about the 2017 edition of stock analyst Mary Meeker’s Internet Trends Report. Weighing in at 355 slides, there’s plenty of data for everyone to chew on.

One stat causing jubilation is that internet ad spending is projected to top TV ad spending within six months—and just keep rising. TV’s days as the king of the ad budgets is just about over, the report says.

But be careful with that either/or approach, online video advertising company YuMe warns. Online video marketers should know better: It’s no longer TV vs online; it’s now TV, desktop, mobile, and streaming devices all together.

“Mary Meeker’s report suggests we are set to reach a much-anticipated tipping point in the next six months: Internet ad spend will finally eclipse TV ad spend,” says YuMe chief revenue officer Michael Hudes. “It’s as much a reflection of overall growth of the digital pie as it is that TV buyers are finally shifting more meaningful spend into digital. But comparing the two as if they are opposition is a mistake. NBCU prior to the upfronts announced that it was allocating $1 billion of inventory for targeted TV. Their definition of targeted TV extends across their broadcast and cable networks as well as their digital properties. The future of video is connected. It is not an either/or scenario—it’s much more blended and nuanced.”

The report finds that Google and Facebook together take up 85 percent of internet advertising’s growth, and that number is rising higher. Online advertisers find measuring ROI challenging (as do offline advertisers), and ad blocker use is increasing (especially in developing markets.

Looking at online ad effectiveness, the report says people like skippable video ads and those that incentivize them with some kind of reward. Consumers ranked those highly.

“Meeker’s report shows consumer preference for video ads where viewers have more control over their experience. It comes as no great surprise that the greatest control and brand value comes from skippable pre-roll. It is the true gold standard in video,” Hudes says. “In a recent study YuMe conducted with IPG, pre-roll is considered to be the least interruptive format for consumers. It’s also the only one tuned for brands: Pre-roll was shown to be the most informative and engaging video ad format. And those benefits translate to tangible brand ROI.”

Meeker is a partner at the venture capital firm of Kleiner Perkins Caufield & Byers. Watch the video of her delivering the report at the Code Conference this week.


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