5 charts on video ads: High spend, social cache, and measurement headaches

As more streaming platforms launch ads and user attention remains high on sites like TikTok and YouTube, advertisers are splitting video budgets between social, streaming, and online video. Here are five charts to help demystify video advertising.

1. Video ad spend is much higher in the US than anywhere else

Video ad spend in the US will hit $108.15 billion this year, up 20.8% over 2023, per our March 2024 forecast. That puts the US around four times ahead of China, the next biggest video ad spender. In the US, video will make up 35.7% of total digital ad spend, while in China it’s 18.7%.

US audiences are used to video ads, meaning the fast-growing format won’t feel intrusive to them. That means US advertisers are investing heavily in the format.

The US’s lead over China is also because of social media’s high ad spend in the US. Total social network ad spend in China this year ($38.64 billion) will be less than the US ($48.89 billion), per our forecast.

2. Social video, CTV dominate video ad spend

Social video accounts for the largest amount of US digital video ad spend at $23.4 billion, followed by connected TV (CTV) at $22.7 billion. Online video lags behind both, at $16.8 billion, according to data from the Interactive Advertising Bureau (IAB) in conjunction with Advertiser Perceptions and Guideline.

Social network video ad spend will grow by 24.6% this year, per our March 2024 forecast. Platforms are leaning into longer videos and users are willing to watch them, which is creating more ad inventory mid-roll, as noted in our “Social Video 2024” report.

3. Ad buyers are looking for scalable, high-quality video ads

Reach/scale and ad quality are the most important criteria when buying digital video ads, according to US agencies and marketers, followed by measurement, according to IAB, Advertiser Perceptions, and Guideline data.

Not all CTV platforms have that reach and scale, though the more popular ones do. On the converse, social video platforms like TikTok have a massive user base, but factors like brand safety and suitability may be more difficult to ensure.

4. Consumers are okay with longer ads

When it comes to commerce video ads, which use a clear call to action to prompt purchase actions, consumers’ preferred ad length is between 30 to 45 seconds, per the IAB and Alter Agents. But advertisers’ most commonly used ad length is less than 15 seconds.

Those shorter ad buys are likely cheaper for advertisers, but they have less room for storytelling than a longer spot. Longer commerce video ads may work better as consumers become accustomed to higher—and longer—video ad loads.

5. Ad measurement isn’t easy for video ad campaigns

The No. 1 issue in measuring TV/video ad effectiveness is co-viewing or multiple people watching content together, according to the IAB, Advertiser Perceptions, and Guideline. This is something advertisers really can’t account for, which means they can’t definitively know how many people their ads have reached.

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