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5 Ways Video Advertising Will Radically Change by 2024

Dave Morgan
Dave Morgan  |  Executive Chairman
Published: Jun. 21, 2021

The video ad world will change more in the next three years than it has in the past 60. What was built originally as a brand-building channel has evolved into one of the most important customer-acquisition and performance channels available to marketers.

First, some history: Video has been the top advertising channel since the 1960s, powered by the efforts of large brands like Coca-Cola, P&G and GM to use high-impact television ads to dominate share of voice and awareness among target customers for their mass products and brands.

With all of TV dominated by three or four networks, these companies and their few competitors could buy up virtually all the “prime” ad inventory in advance, locking out challenger brands and then jousting for market share among themselves with TV spend, celebrity endorsements, shelf-slotting and price promotion as the steeds, lances and broadswords of their noble combat.

Brand dollars are not going away. Sixty years later, that strategy is what still drives the video ad market in the U.S., with well under 200 companies representing the vast, vast majority of all national TV ad spend. That’s why Wall Street analyst Michael Nathanson believes that while linear television will certainly lose a significant portion of its audience over the next five years, its ad spend will decline by only a fraction of those losses. There just aren’t other media channels that can replicate TV’s scaled delivery of high-reaching ads for mass brands.

Agency model mirrored big-brand concentration. TV media owners reinforced this large-brand, concentrated-demand model by building high-touch service organizations around the few large ad agencies that had formed around serving those brands. They leveraged those agencies as their true sales channels, selling them the bulk of their inventory in annual upfronts supplemented by premium-priced scatter buys through the year.

DRTV was a dumping play. What wasn’t sold or used for internal promotions or “make goods” to cover ratings misses was largely sold on an as-available basis to direct-response marketers, typically preemptable, at low rates, in bulk and with creative restrictions, designed to ensure no secondary market access for the big brands.

Video is now more than TV, with performance marketing its growth path. TV is no longer the only play in video advertising. We have digital video on mobile and desktops, and we have a super-fast-growing connected TV ad market as more and more Americans adopt streaming services.

Automated, data-driven software platforms are now being used to power linear TV ad targeting, planning, trafficking, measurement and attribution, as well as their pure digital brethren. This means that video advertisers can now get full-funnel, closed-loop measurements, running TV as they also run search, social and programmatic banners.

New video ad leaderboard by 2024. With integrated performance marketing now emerging across digital video, TV and CTV, the market leaders’ advantages will be in data, science and software, not content production.

Already, Amazon is one of top two or three sellers of video advertising in the world. So is Google’s YouTube. As performance marketing ad yields exceed those generated by brand spend -- already happening today for a lot of inventory in the TV and video ad ecosystem -- those companies will end up controlling much of TV’s inventory. If big tech players can pay more for the spots, and still service the big brands, why won’t tomorrow’s TV ad companies sell them all their inventory directly?

They will.

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An earlier version of this blog was originally published by MediaPost.