The inexorable rise of video advertising

• The value of ad spend for digital display advertising in 2018 reached some £5.25 billion, of which video advertising represents the largest display percentage at 44%.
• Ad spend on digital advertising continues to increase year on year, with a 15% increase last year. This highlights the trend for advertisers to demand more and more video advertising content
• Those involved in the industry are well aware of the increasing pressure on advertisers and agencies to produce more content and even richer content, but it is even clearer now that it needs to be done for a lower cost.
• AI is increasingly influencing how ads are being deployed. Savvy brands are utilising augmented reality to enable consumers to interact with the brand. For example, Coca Cola enabled consumers to use an image filter with their famous red Christmas truck for their “holiday's are coming” campaign.
• There is, according to Jorg Nowak from RhythmOne huge potential for video advertising through internet-connected TVs (“CTV”). The increase in ad requests across CTV devices was 1,640% between 2017 and 2018, and CTV attracts high completion rates. Rhythm One’s tips for the adtech community included: (i) make it easier for advertisers to purchase multi-screen digital video alongside broadcast media; (ii) target viewers on purchase based data and other data insights, not just demographics; (iii) use more enhanced creative executions; and (iv) offer measurement solutions to advertisers.

There are of course a plethora of legal issues to consider in video advertising. These range from i) checking and obtaining necessary permissions (so as to address copyright, trade mark, talent publicity rights and location issues), ii) ensuring that the video advertising is appearing in the correct media and targeted appropriately and iii) compliance with consumer facing laws and codes such as the Consumer Protection from Unfair Trading Regs and CAP Code.

As if that was not enough, there are various data privacy hurdles and a renewed focus from the ICO and other regulatory bodies. The adtech industry is already under scrutiny in respect of the transparency around the collection and sharing of users’ data (see here for a discussion of those issues). Individuals also have a right to object to profiling (i.e. the automated collection and evaluation of personal data to understand an individual's behaviour and preferences) which may prevent individuals being served with targeted video advertising.

There are also now tighter controls on the collection of children’s personal data and the serving of adverts to children. The ICO has recently completed its consultation on a Code of Practice to help protect children using online services (e.g. apps, connected toys, social media platforms, streaming services). It applies to online services ‘likely to be accessed by children’ and could significantly curtail the amount of data that is currently collected indiscriminately on the users of such online services. For example, according to the Code, geolocation services should be turned off by default. This means that for websites or apps which are likely to be accessed by children, if the online service provider does not have the ability to identify if the visitor is an adult or a child, geolocation options would have to remain switched off altogether preventing the collection of such demographic information.

The future of video advertising is very bright indeed, but advertisers and agencies alike will need to continue to navigate the complex rules around it, including the transparency of data collection and ensuring that their ad targeting is appropriate and lawful.