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Claims that adspend set to soar amid consumer demand for online video

Chinese consumers will spend the most time glued to online videos by 2020, as a report by Zenith has forecast rapid growth of online video ad spend over the next two years.

The agency’s annual Online Video Forecasts 2018 said online video ad spend grew 20% in 2017 to reach US$27 and will climb a further 19% this year.

It will then rise an average of 17% to reach US$43bn by 2020.

Video’s share of total online display advertising is also rising steadily and will account for 30% by 2020, up from 27% in 2017.

Although the online video ad market still remains small compared to TV – it was 14% the size of TV in 2017 – it is expected to rise to 23% of television adspend in two years time.

Zenith head of forecasting and director of global intelligence, Jonathan Barnard, said the report illustrates the need for brands to look carefully at their video strategy.

“The rapid rise in video viewing makes online video the world fastest-growing advertising format, creating new strategic and creative opportunities,” he said. “Brands that do not currently have a strategy for online video need to think about getting one.”

“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.”

Advertising expenditure (US$m)

Marketers spend on video channels is bring driven by the rise in consumer demand for such content.

Globally, consumers will spend an average of 67 minute day watching online video this year, up from 56 minutes in 2017, according to the report. By 2020 that will rise to 84 minutes a day.

China will have the most avid viewers by the end of the decade with consumers spending an average of 105 minutes a day glued to their desktop or, increasingly, their mobile devices,. China is followed by Russia (102 minutes) and the UK (101 minutes).

In line with the appetite for online video, Chinese brands will spend the most by some distance in Asia – US$3,532b by 2020, up from $3,364b in 2018.

Indian brands are predicted to spend $603m by 2020, up from $286m in 2018 while video adspend in Hong Kong will rise from $250m this year to $338m over the next 24 months.

Thailand, meanwhile, will see video ad spend of $183m, up from $103m, while in Malaysia, Zenith predicts marketers will nearly double their spend to $140m by 2020.

Singapore trails significantly, with online video adspend expected to hit only $27m this year, $36m in 2019 and $46m in 2020.

Zenith said the global consumption of online video accounts for almost all the growth in total internet use, and is growing faster than media consumption overall.

“It is taking consumption time from traditional media,” the report stated. “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.”

With online video viewing rising 91% between 2015 and 2017, verses adspend growth of 52%, Zenith said 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,” it said.

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