Forecast: Strong Growth in Online Video Advertising Through 2020

A new forecast by Zenith, part of Publicis Media, sees excellent momentum for the online video industry. Online video advertising is receiving strong interest, and publishers with premium inventory will reap the most gains.

"Online video has grown even faster than we expected this year, as every major platform has rushed to exploit demand from advertisers," says report author Jonathan Barnard, head of forecasting and director of global intelligence at Zenith. "We expect online video advertising to grow 17 percent a year to 2020, faster than any other digital channel. The supply of high-quality online video content is still limited, though, so content producers that can attract viewers will benefit from rising prices as well as higher volumes."

For comparison, social media will grow by 16 percent a year and display by 12 percent.

As for online ad mediums, mobile will enjoy the strongest growth, Zenith says: It grew by 33 percent in 2017 and will have an average growth rate of 18 percent through 2020. That year, mobile will have 28.8 percent of total global ad spending, second only to TV at 31.4 percent.

With TV evolving into a medium that combines over-the-air, cable and satellite, and streamed programming, Zenith says it no longer makes sense to consider legacy TV models by themselves. Instead, it groups the whole area as audiovisual advertising, and notes that legacy and online naturally complement each other for ad effectiveness.

"Television offers unparalleled capacity to build reach, while online video offers pinpoint targeting and the potential for personalization of marketing messages. Both are powerful tools for establishing brand awareness and associations," the report says.

Audiovisual advertising made up 48.7 percent of display advertising in 2017, and will grow to 49.0 percent in 2020, Zenith forecasts.

The full Advertising Expenditure Forecast for December 2017 is available for purchase at Zenith's site.

Troy Dreier's article first appeared on OnlineVideo.net