Video is becoming marketers’ tool of choice—and U.S. companies are investing $135 billion this year in online video to market products and services, according to new research from smart video storytelling application Magisto.
The firm’s new report, Video’s Payday: The Modern Marketing Dilemma and the State of Business Video, is the first release in a three-part series and examines the rapid rise of online video, resulting in new rules of marketing engagement that have tilted markedly in favor of authenticity.
The research examined the digital video spend among U.S. businesses and found that over the next year, American businesses will spend an estimated $135 billion on digital video. The figure takes into account the entire video ecosystem, including production, tools, people and media, painting a contrasting picture compared to existing predictions for the market.
As a point of reference, advertisers this year expect to spend $83 billion on digital ads and $71 billion on TV commercials. This new research points to the digital video spend nearly equaling the combined spend of digital and TV advertising in the U.S.
Beyond the expected size of the digital video market, the report also looks closely at the factors that are pushing brands toward a medium that gives them the ability to reach consumers in a fragmented attention economy.
“The traditional, linear mode of communication, dominated by advertising and controlled by legacy marketing, simply doesn’t work today. It is more white noise at a time when signal is the scarcity,” said Oren Boiman, CEO of Magisto, in a news release. “The enormous influence of social media and the bottom up culture of millennials have led to a new marketing condition where the consumer is in control, word-of-mouth is a medium unto itself, and authenticity is paramount to engaging customers.”
This complex customer matrix, where consumers engage with brands in increasingly diverse media or touch points, is pushing more brands to invest in digital video for its ability to tell stories and connect to emotions across varied channels with equal efficacy. Because video offers businesses a credible way to be engaging and to actually be heard in the din of the new social narrative, it is being adopted at an astonishing rate, the report says.
Additional findings from the report include:
- 84 percent of marketers intend to create more business videos in 2017
- 60 percent of businesses spend more than 25% of their marketing budget on video
- 64 percent of marketers report creating video content internally
- Businesses are 150% more concerned about the speed of video creation than the cost
Magisto surveyed 545 marketing decision makers in the U.S. at small, medium and large businesses from July to August 2017.