Faaez Samadi
Jul 16, 2018

Online video ad spend growth slows: Zenith

The agency’s latest report finds that while spend is still high, its rate of growth is slipping year-on-year.

Online video ad spend growth slows: Zenith

Online video ad spend growth rates continue to slip despite increasing amounts of online video content being consumed worldwide, according to Zenith’s 2018 ‘Online Video Forecasts’ report.

Reaching an estimated US$27 billion, the report found that online video ad spend grew 20% in 2017, which remains a healthy figure. However, it continues a trend of slowing growth in the market, with growth peaking at 36% in 2014 and falling steadily since. Zenith forecasted 19% growth in 2018 and an average of 17% to 2020, showing that the slower pace of growth is expected to continue.

In contrast, online video audiences are growing rapidly, with Zenith predicting that the average consumer will watch 84 minutes of online videos a day by 2020. China will lead the world by then, with local consumers watching an average of 105 minutes, the report forecasted.

For the purposes of the study, Zenith’s definition of online video means 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 like YouTube, and videos viewed on social media.

In addition, Zenith said online video audiences are growing far ahead of demand – up 91% between 2015 and 2017 – while ad spend grew 52%. Consequently the cost of online video ads has decreased significantly, but the report forecasted that prices would stablise as the market grows and even increase from 2019 onwards.

Brands and platforms are also adjusting their online video ads in line with consumer expectations, as demonstrated by the increase in ‘out-stream’ video ads, Zenith said. Previously most ads appeared within video content, an interruptive ‘in-stream’ format that has seen much backlash from consumers through skipping where possible or installing ad blockers. But with the developments in social media advertising and video content, standalone video ads or ‘outstream’ ads are in the ascendancy – in the UK, they actually overtook in-stream ads.  

Source:
Campaign Asia

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