Online video viewing to reach 67 minutes per day in 2018: Zenith

Zenith predicts that global consumers will spend an average of 67 minutes a day watching online video in 2018, up from 56 minutes last year. In the fourth edition of its annual report, ‘Online Video Forecasts’, Zenith estimates that 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. 

The report further states that global online video consumption grew by 11 minutes a day in 2017, and it is expected to grow by an average of 9 minutes a day each year to 2020. Online video consumption 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. 

Zenith estimates that online video ad spend grew 20 per cent in 2017 to reach US$27 billion. Growth peaked at 36 per cent in 2014 and has fallen steadily since then, but still remains very high. Zenith forecasts 19 per cent growth in 2018, and an average of 17 per cent annual growth to 2020, when online video ad spend will reach US$43 billion. Video’s share of online display advertising is rising steadily: it accounted for 27 per cent of display ad spend in 2017, and is expected to account for 30 per cent in 2020. 

The supply of online video audiences has been growing ahead of demand in recent years: online video viewing grew 91 per cent between 2015 and 2017, while ad spend grew 52 per cent. The cost of online video advertising has therefore come down substantially. As the growth of video consumption grows, prices are expected 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 per cent to 2 per cent annual growth, this fraction is rising rapidly. The online video ad market was 10 per cent of the size of the television ad market in 2015, and 14 per cent in 2017. By 2020 we expect online video ad spend to be 23 per cent of the size of television ad spend. 

With the rapid growth of online viewing, more brands are now seen planning television and online video together to optimise frequency. 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. Because a viewer can simply scroll past them, out-stream ads do not have the narrative leeway available to interruptive ads. This is changing the structure of online video creative. 

A release issued quoted Jonathan Barnard, Zenith’s Head of Forecasting and Director of Global Intelligence, as saying, “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. 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.” 

This year’s edition of Online Video Forecasts report covers 59 key markets and includes 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, for example, YouTube, and videos viewed on social media.