Digital Video Ad Spend is Over-Estimated

How much money are advertisers actually investing in digital video media?

The numbers tossed out at conferences, in reports and trade press articles typically range between $6.0 and $6.7 billion dollars. An exclusive analysis by MyersBizNet, however, suggests actual digital video ad investments in 2014 will total only $4.8 billion, far less than most digital video executives and analysts have been estimating. The $4.8b forecast more accurately reflects the budgets reported by agency executives and more closely aligns with the limited data available through reliable public sources.

MyersBizNet exclusively reports the digital revenues of legacy media categories, and estimates the percentage of those revenues represented by video. Separately, MyersBizNet reports "Online Originated Digital Video Advertising," which we estimate will be $2.195 billion in 2014. The immediate reaction by industry executives is that YouTube and Hulu alone account for a reported $2.0 billion! Adding the video revenues of Yahoo, AOL, Tremor, Yume and others must make the category total far greater. And therein lies the apparent conflict between industry data and MyersBizNet data.

It appears industry data may count a significant share of advertiser investments twice – first by including the self-reported ad revenues of digital media companies before they distribute the revenue share to their content suppliers (TV networks, producers and studios). They then add estimates of the digital video ad revenues of the networks and other video content suppliers, which include both the revenues these companies generate directly AND the revenues they generate through distribution partners Hulu, YouTube, AOL Yahoo, etc.

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