Thanks to heavy promotion by top platforms like Facebook, YouTube, Twitter and Snapchat, spending on social video ads has experienced a surge in many markets around the world. But according to a new analysis, advertiser investments in this rapidly growing format have hit a temporary rough spot.
According to a forecast examining social video’s share of ad spending among advertisers worldwide between Q1 2016 and Q1 2017 by online advertising firm Kenshoo, investment in the format appears to have hit a plateau. While social video ad spending share saw continuous increases between Q1 and Q4 of 2016, Kenshoo noted there was a slight decline during the first quarter of this year on its platform.
However, because of the ongoing push by many social ad platforms to encourage more video spending, the slowdown does not seem likely to be cause for concern. Instead, it’s probably just a temporary roadblock on the path toward further growth.
For example, among the factors mentioned by Kenshoo for the decline was the impact of the US presidential election in Q4 2016, a period that saw unusually heavy video ad spending.
In addition, there’s the complicating factor of the recent advertiser controversy related to ad quality on YouTube. While the boycott may have had a small impact, it seems more likely that it only temporarily depressed spending.
More important is evidence that consumers are demonstrating high engagement with branded video content on social platforms. As noted in an October 2016 polling conducted by Vanson Bourne for Brightcove, 40% or more of internet users in the US, Australia, the UK and France watched a branded video on social media during the time period studied.
Even more promising was that a significant portion of respondents made a purchase after watching. This was highest in the US (53%) and Australia (48%).
Social video ad spending may be experiencing a temporary slowdown among advertisers. But as a variety of other market signals emphasize, it’s likely be an increasingly important format for investment in 2017.