Despite the economic crisis caused by the Covid-19 pandemic, video entertainment ad spend is expected to remain fairly stable throughout 2020.
According to ROI agency Zenith, video ad spend will shrink by only 0.2%. By contrast, the ad market as a whole is predicted to drop by 8.7% this year.
The report said that this is largely to do with increased time spent watching TV by consumers and increased supply of content – along with competition among video brands for viewers.
This is also reflected in the fact that online video brands have been outpacing traditional TV. Online video brands in the US increased their ad budgets by 142% in 2019, compared to 15% for TV brands. This trend is maintained across the Atlantic, with adspend by online video platforms in the UK increasing by 79% vs 34% for traditional TV. The report notes that both markets have pushed up spending in the face of new competition.
Also aiding this increased spend was the reduction on out-of-home and cinema spend, with millions of citizens across the world being instructed to stay at home. As such, digital spending is forecast to rise from 53% of total video entertainment spend in 2019 to 57% in 2020.
Christian Lee, Global Managing Director, Zenith, said: “Consumers are now faced with a vast and confusing array of programmes and films vying for their attention. Video brands need to cut through this complexity and give consumers entertainment that matches their personal preferences with minimum fuss. Brands that provide compelling experiences and act as more than just repositories of content will be best positioned for growth in the long term.”
In spite of all this positive growth for video entertainment adspend, the market will still be impacted by the economic climate and is expected to underperform in the next two years. Zenith said that video entertainment adspend will only return to growth in 2022 – a global growth of 1.3%.
Some markets will experience more significant growth in 2022, the report says. Spain and India – both rapidly growing digital markets – will spend 27% and 19% more than in 2019 respectively, while the US and Australia will see decline.
Jonathan Barnard, Zenith’s Head of Forecasting, said: “Consumers are currently benefiting from a generous supply of video content from brands vying for their loyalty. This competition is providing a large boost to video entertainment adspend this year. But this level of investment in both content and advertising will prove difficult to sustain for the long-term, and we forecast very little growth in 2021 and 2022.”
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24 November 2020 @ 20:00:00 UTC