LONDON—Video entertainment ad spending looks like it will get out of 2020 little worse for wear, according to projections from Zenith Media that see the overall market dipping just 0.2% across 10 markets. The entire ad market is expected to drop 8.7%, per Zenith.

The forecast comes from Zenith’s “Business Intelligence—Video Entertainment” report, which cites that the increased demand from consumers, increased supply of content and competition among video brands for viewers allowed the video entertainment sector to remain stable during the COVID-19 pandemic.

Online video brands are leading the way, outpacing traditional TV, Zenith shares. In the U.S., online video brands increased ad budgets by 142%, compared to a 15% increase in spending by TV brands. The U.K. had similar disparity, with a 79% increase in ad spending by online video platforms while TV grew 34%. 

Zenith points out that TV broadcasters and pay-TV platforms increased spending in response to this new competition, but believes that it will be unsustainable as decline in revenues continue because of COVID-19 and structural issues. Meanwhile the online video platforms will continue to raise their budgets as they seek to build a loyal customer base.

Digital advertising has been a key area of focus for video entertainment ad spending with other options like out-of-home and cinema avenues limited or outright closed. In 2019, video entertainment ad spending for digital was 53% of its total, in 2020 that is expected to increase to 57%.

However, video entertainment is not expected to increase its ad spending tremendously over the next two years, Zenith estimates. Online video platforms are expected to have less capacity to raise budgets after heavy spending in 2020, while traditional TV will continue to be weighed down by shrinking revenues from TV advertising and pay-TV subscriptions. 

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The U.S. is one of the only markets where Zenith estimates the video entertainment ad spending will decline after 2020, saying that rising online revenues will not be able to compensate for the ongoing traditional TV’s shrinking revenues, which will result in reduced ad spending budgets. Growth is, and will be, strongest in Spain and India.

Zenith projects no growth in video entertainment ad spending in 2021 and 1.3% growth in 2022. That will still bump it up 1.2% in 2022 compared to 2019; the overall ad market will be 0.6% below 2019 levels.

For more information, visit www.zenithmedia.com.  

LONDON—Online video is going mobile, as a new report from Zenith has revealed that mobile devices are the key factor in the increase of daily online video viewing by consumers. The report predicts that the average consumer will spend 47.4 minutes a day watching online videos, an increase of 20 percent over 2016’s 39.6 minutes.

This growth, according to Zenith, can be credited to a 35 percent increase in viewing on mobile devices like smartphones and tablets to an average of 28.8 minutes a day. Fixed devices—i.e. PCs, laptops and smart TVs—will rise just 2 percent to 18.6 minutes a day. This year’s findings will reportedly be the peak for fixed devices’ online video viewing, as any growth that occurs with smart TVs will not be able to compensate for the decline in viewing on desktops and laptops, per Zenith, which expects fixed devices to shrink by 1 percent in 2018 and 2 percent in 2019. Inversely, with the spread of mobile devices, improved displays and faster mobile data connections, mobile viewing will continue to rise, with Zentih forecasting it accounting for 72 percent of all online video viewing by 2019.

Mobile is also expected to surpass fixed devices with online video advertising. As of this year, fixed video adspend is more than mobile at $15.2 billion to $12 billion. However, by next year, those numbers are expected to flip, with mobile adspend being predicted at $18 billion and fixed video staying put at $15 billion. Overall online video advertising is becoming more important, making up 28 percent of total expenditure on digital display advertising in 2017, and expected to reach 31 percent by 2019.

These findings are from the third edition of Zenith’s annual “Online Video Forecasts” report. This year’s report covered 63 markets and forecasted online video consumption and advertising with commentaries on the development of individual markets by local experts.