The Impact Of Big Data On Video Advertising

Marketers are shifting ad spend from TV to digital video ads


Big data can be defined as massive data sets that may be computationally analyzed to identify unique patterns, trends and relationships about human behavior and interactions. Video advertising, on the other hand, refers to any form of advertising, including text, display, or even video, that occurs before, during or after a video stream on the internet. There is also another angle to this one, which attributes video advertising to all ad content presented in the form of a video.

As such, this form of advertising also applies to video advertising done through mainstream media platforms like TV, as well as, ads run during major events like the Super Bowl. In fact, video advertising via TV sets is historically the most popular form of advertising.

However, the tide has been changing over the last few years as more advertisers continue to redirect their budgets towards digital video advertising on the internet. This shift has primarily been driven by the increasing use of Big Data across several online platforms.

So, how exactly does Big Data drive demand for digital video advertising?

The time spent on connected devices has increased rapidly over the last few years prompting a shift from TV advertising to digital advertising. The reason behind this rapid growth is down to the increased usage and adoption rate of social media platforms, messenger apps, and video streaming applications.

People are now spending an average of 6 ½ hours per day in the digital space (mobile phones, tablets, PCs, and laptops) which eclipses Nielsen’s estimate on the number of hours every American spends watching TV per day (five hours and four minutes). On the other hand, people are already spending more than two hours per day on social media which, if tracked and used well to target customers can boost the return on ad spend.

Furthermore, the intel that a company that focuses on advertising on the internet far outweighs what they could get from TV. With TV, the media assumes that a certain group of people are interested in specific programs, during which they can then choose to air advertiser content depending on their client’s target audience.

On the other hand, social media, messenger apps, and video streaming platforms collect vital information about the user. This provides a clear insight into the company’s target market. And given the type of pressure that marketers are put under to increase sales, the digital option is becoming more appealing.

By using big data, companies can identify unique patterns, trends and relationships about user behavior and interactions. Therefore, while formulating their ads, they can target a specific audience with more accuracy. Additionally, using programmatic techniques, companies can also draw various conclusions about the performance of their ads thereby forming a basis for improvement.

This allows them to optimally utilize their advertising budgets by focusing on what returns high conversion rates and cutting spending on video ads that underperformed. PwC forecasts the U.S. alone will experience a CAGR of about 26.5% through the year 2020 in the mobile advertising market and this growth will certainly reduce ad spend on traditional advertising channels like TV. With online ads, advertising companies deal with a more measurable data.

As such, there is a significant shift towards digital video advertising compared to TV advertising. According to a survey conducted by Yahoo and Ad Perceptions earlier this year, 56% of the marketers surveyed indicated that they were planning to divert their budgets from TV to digital video advertising 'while 71% felt digital video was as or more effective than TV,' reports BrightRoll.

The kind of information gathered from social media, and video streaming platforms allow companies to structure more personalized ads, which can be created using powerful video editing software to engage the customer in a gainful way. Modern consumers are very sensitive and thus must be approached strategically if an organization is determined to convert them into loyal customers.

In fact, one of the leading research companies, Boston Consulting Group has recently backed this approach with a study that showed 6%-10% increase in sales for companies that used technology and data to provide personalized experiences to their customers.

And in another recent article published by MarketingProfs, 'Nielsen Catalina Solutions (NCS) reported that targeting digital video increases performance by 27%.' Return on ad spend with digital video increases to $3 and $4 when targeting is combined with personalization, the report added.

Therefore, TV advertising is more like taking a shot in the dark when compared to digital advertising on the internet. This has led to a massive growth in digital video advertising over the last few years with the market expanding by double-double digit CAGR. This year, eMarketer expects 24% growth in digital video ad spend, which will value the market at about $13 billion.

Nonetheless, when compared with other types of digital ads, including text and display, digital video advertising is still far behind in terms of budget allocation. According to a survey done by MarketingProfs, only 42% of the marketers surveyed consider digital video a powerful technic for driving sales. That’s even though 87% of the 200+ marketers involved in the survey reported a positive impact on their ROI after using digital video.


In general, digital advertising capitalizes on the massive volumes of data being added to the internet daily. This helps in deriving information that can be used to create personalized, targeted and trackable ads. As such, businesses can accurately calculate the return on ad spend on every marketing channel including social media and video streaming services.

Digital video ads are slowly closing on other online ads (text and display) but already appear to be tramping TV ads based on the budget allocation and the projected growth.


Read next:

Why Blockchain Hype Must End