• by Gavin O'Malley  @mp_gavin, November 22, 2013

Continuing to reshape the advertising ecosystem, analysts are beyond bullish about digital video in 2014 and beyond. “We expect [the growth of digital video] to become a prominent theme in 2014, with meaningful dollars moving by 2015,” Macquarie Securities analysts said in a joint research note released Friday.

To back up their optimism, the research team -- including Tim Nollen, Ben Schachter, Sunny Kwak, and John Merrick -- cited a recent Magna Global forecast, which put video at a 20% CAGR in ad dollars through 2018.

As a result, the Macquarie analysts expect print and static display ads to continue to lose money to digital video.

Whether TV will suffer is a more complicated issue, however. “This is partly a matter of semantics as definitions begin to blur,” the analysts explain in their report. “Is an ad viewed on the Watch ESPN app considered TV or online video?”

“As such, traditional TV networks won’t necessarily lose,” they write. “Another possibility is the total ad pie grows, if strong ROI on programmatic ads encourages marketers to allocate larger budgets to online media.”

The analysts suggest that the programmatic advertising could actually lift all ships. 

Regardless of where the money comes from, reach and measurement are understood to be critical to digital video’s ongoing success. “Online video is getting there, now [reaching] 60% of the U.S. population,” according to Macquarie’s team.

More broadly, the analysts expect standardized measurement, programmatic ad sales, and new hardware -- in the form of mobile devices, as well as TVs or TV-connected devices from Google, Amazon and Apple -- to be key drivers of online video growth.

As for the trend’s big winners and losers, Macquarie sees agencies and Nielsen benefiting from video’s rise.

To illustrate, it cites two online video ad commitments that Publicis recently signed with Google: one through the holding company’s MediaVest media-buying agency; and separately in a $100 million deal in which digital marketing agencies DigitasLBi and Razorfish stand to gain ad inventory across Google platforms, including YouTube and Google+.

Also noted is Google recent about-face decision to include Nielsen’s online campaign ratings (OCR) data in campaigns sold using OCR tags.

“Nielsen and Google have begun to collaborate,” the Macquarie team notes. “We think this demonstrates the importance of 3rd-party measurement of digital media, even as Google can generate data itself.” 

Meanwhile, Macquarie also believes that Google, Facebook, Amazon and AOL all should benefit greatly from video’s reign. “We think the popularity and ad effectiveness of internet and mobile platforms at these companies puts them in position to attract ad spending.”

Industrywide, video advertising is on track to reach $4.09 billion this year, which would represent an increase of 41%, according to eMarketer. The research firm expects programmatic ad buying to surpass $3.3 billion -- an increase of 73% year-over-year.