Rising Video Viewing is Bringing Down Video Advertising Costs says Zenith


Global consumers on average now watch over an hour of digital video content per day according to research from Publicis Media-owned agency Zenith, and this growth in online viewing is bringing down the cost of digital video advertising.

Zenith’s Online Video Forecasts 2018 report looked at 59 “key markets” and found that the average consumer watches 67 minutes of video content online per day, up from 56 minutes per day last year. This figure is expected to grow by an average of nine minutes per day each year until 2020, when it will reach almost an hour and a half per day.

China, Russia and the UK are expected to be the keenest viewers, reaching averages of 105 minutes, 102 minutes and 101 minutes of video content watched each day respectively in 2020. According to the report this growth in video viewing will account for almost all the growth in total internet use that takes place over the next three years.

While some of this extra time is spent watching video on platforms like Netflix and Amazon Prime Video which currently don’t run ads (though as VAN has reported, it looks like Amazon is moving is that direction), Zenith says plenty is spent on commercial platforms, meaning the supply of commercial audiences is rising rapidly. Video ad spend is also growing quickly, but not fast enough to match this growth in minutes spent watching video. Video ad spend growth peaked at 36 percent in 2014 according to Zenith’s data, and is forecast to be 19 percent this year and 17 percent in 2020.

As such, supply is currently outpacing demand, bringing down the cost of video advertising, claims the report. Zenith says online video viewing grew 91 percent between 2015 and 2017, while ad spend grew by 52 percent, bringing down the average cost of video advertising “substantially”. Zenith predicts costs will continue to fall until 2019 when it expects prices to stabilise, with mild increases from 2019 onwards.

This reduction in costs might be expected to draw new advertisers into digital video advertising. But while the price of media might be falling, the costs of creating video ads won’t necessarily change, and could remain a barrier to advertisers not already using video. As a result, the price drop might mostly benefit those companies already invested and experienced in running digital video campaigns.

Zenith’s head of forecasting and director of global intelligence Jonathan Barnard however says that given how video viewing will continue to rise, brand not already using video should consider how they might start doing so. “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,” he said.

“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,” Barnard added.


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