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How much backing should you really put behind your video advertising?

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 is expected to spend 84 minutes a day watching videos online.

Global online video consumption grew by 11 minutes a day in 2017, and Zenith 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.

Online video comprises content viewed over an internet connection, including broadcaster-owned platforms such as Hulu, ‘over-the-top’ subscription services like Netflix, video-sharing sites, YouTube, and videos viewed on social media.

The report added that 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. Zenith forecasted 19% growth in 2018, and an average of 17% annual growth to 2020, when online video adspend will reach US$43bn.

Video’s share of online display advertising is rising steadily: it accounted for 27% of display adspend in 2017, and is expected it to account for 30% in 2020. Growth peaked at 36% in 2014 and has fallen steadily since then, but still remains very high. 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, prices are expected to stabilise moving forward, with mild increases from 2019 onwards.

Out-stream ads on the rise

However, 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. Mainly due 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 partnership between online and TV

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 and television complement each other well, with most brands initially using online video to add incremental reach to their existing television campaigns.

But with the rapid growth of online viewing we are now seeing more brands plan television and online video together to optimise frequency.

By cutting out television spots that lead to very frequent exposure among heavy television viewers, and using online video to target – and retarget – light television viewers, brands are using television and online video together to cut out both overexposure and underexposure within the target audience, maximising recall at a reduced price.

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.

“Online video is driving growth in global media consumption, as smartphones with high-speed data connections make high-quality video available to people on the move, and smart TV sets give viewers unparalleled choice in the living room,” said Jonathan Barnard, zenith’s head of forecasting and director of global intelligence.

“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.”

by Staff Writer
source: Marketing