Global consumers will spend an average of 67 minutes a day watching online video this year, up from 56 minutes last year, according to Zenith’s Online Video Forecasts 2018.
By 2020 the average person will be spending 84 minutes a day watching videos online.
In that year,China will have the keenest viewers, with the average person spending 105 minutes a day watching online video, followed by Russia (102 minutes) and the UK (101 minutes). This rapid rise in consumption is leading to a shift in the way brands plan campaigns across both television and online video.
This year’s edition covers 59 key markets. By online video, we mean all video content viewed over an internet connection, including broadcaster-owned platforms such as Hulu, ‘over-the-top’ subscription services like Netflix, video-sharing sites, e.g. YouTube, and videos viewed on social media.
Global online video consumption grew by 11 minutes a day in 2017, and we expect it to grow by an average of 9 minutes a day each year to 2020. It accounts for almost all the growth in total internet use, and is growing faster than media consumption overall, so it is taking consumption time from traditional media. Although some of this extra viewing is going to non-commercial platforms such as Amazon Prime and Netflix, plenty of it is going to commercial platforms, so the supply of commercial audiences is rising rapidly.
We estimate that online video ad spend grew 20% in 2017, to reach US$27bn. Growth peaked at 36% in 2014 and has fallen steadily since then, but still remains very high. We forecast 19% growth in 2018, and an average of 17% annual growth to 2020, when online video ad spend will reach US$43bn. Video’s share of online display advertising is rising steadily: it accounted for 27% of display ad spend in 2017, and we expect it to account for 30% in 2020.
The supply of online video audiences has been growing ahead of demand in recent years: online video viewing grew 91% between 2015 and 2017, while adspend grew 52%. The cost of online video advertising has, therefore, come down substantially. As the growth of video consumption grows we expect prices to stabilise, with mild increases from 2019 onwards.
Online video advertising is still only a fraction of the size of television advertising, but because television is stuck at 0% to 2% annual growth, this fraction is rising rapidly. The online video ad market was 10% of the size of the television ad market in 2015, and 14% in 2017. By 2020 we expect online video adspend to be 23% of the size of television adspend.
Online video advertising began by emulating television advertising, with most ads appearing within other video content that the viewers were really interested in as interruptive ‘in-stream’ ads. But over the past few years ‘out-stream’ ads have become common. These are stand-alone video ads that appear within text or images, or within a social news feed. Thanks mainly to the rapid adoption of video content and advertising by social media platforms, out-stream video is rapidly becoming the dominant form of online video advertising. In the UK, for example, it overtook in-stream advertising to account for 56% of online video adspend in 2017. This is changing the structure of online video creative. Because a viewer can simply scroll past them, out-stream ads need to grab the viewer’s attention from the very first second, either with an arresting image or with a celebrity with a dedicated following. They do not have the narrative leeway available to interruptive ads.
The rapid rise in video viewing makes online video the world fastest-growing advertising format, creating new strategic and creative opportunities. Brands that do not currently have a strategy for online video need to think about getting one.
Source:www.zenithmedia.com
