Rise of mobile drives advertisers to invest $30bn in online video despite ongoing risks

WARC Global Ad Trends – A focus on online video advertising

Global, 23 August 2018 – Advertisers are expected to spend a combined $30bn on online video advertising this year, most of which will be paid to social media platforms despite the continuing risks of negative adjacency and ad fraud. The rise of mobile usage is driving video consumption (particularly on mobile-optimised social platforms), which in turn is driving up advertiser investment in video.

These and other key findings are included in the latest monthly Global Ad Trends report focusing on online video advertising compiled by WARC, the international authority on advertising and media effectiveness.

Online to account for 17.5% of global video spend this year, at $30bn – most will go to social platforms

Online video advertising expenditure – inclusive of pre/mid/post roll, social and broadcaster VoD – is expected to rise 27.5% to reach $29.8bn this year. This compares to an anticipated rise of 1.1% for linear TV, which equates to $140.2bn – on a par with the level recorded in 2010. Consequently, online video is set to account for 17.5% of the total $170bn spent on video advertising worldwide this year, up from a share of just 1.3% in 2010.

Rates vary between markets. Online’s share in the US, the largest video market by far, is expected to rise to 19.3% this year, at $15.3bn. China’s online share is projected to rise to 24.7% ($6.5bn) this year, while in the UK online video is expected to account for 38.2% ($2.6bn) of all video adspend.

Most of this money is going to social platforms such as YouTube and Facebook. UK data from the AA/WARC Expenditure Report show that of the £1.6bn spent on online video advertising last year, 81.2% (£1.3bn) was paid to social platforms (up from a share of 55.4% in 2014).

Online video is set to account for almost half of daily internet consumption, with mobile driving growth

Online video consumption – the majority of which is via mobile devices – is rising steadily worldwide. Projections show consumption will rise to 84.1 minutes per day in 2020, up 26.6% from a projected 66.5 minutes this year. Of this, 62.3% of the time will be spent watching via mobile devices (compared to 60.7% currently).

Comparing these figures to wider media consumption data shows that online video’s share of daily consumption is rising across the board. It is expected to reach almost half (46.7%) of all internet usage and 17.1% of total daily media consumption by 2020.

One in ten video ads poses a risk to brands, and video is a prime target for fraud

Data for the second half of 2017 show that at least one in ten online video ads poses a risk of negative adjacency to brands.

For mobile, the content types that pose the most frequent brand risk are violence, and offensive language & controversial news regardless of whether the ad is bought programmatically or publisher direct.

Fraud also poses a risk to online video advertising, especially if the ad is not optimised against such activity. A recent study by Guardian US and Google found that as much as 78% of video spend is susceptible to fraud if the publisher does not employ the ads.txt script within their website.

Summing up, James McDonald, Data Editor, WARC, says: “The vast and continuing increase in video consumption via mobile devices has directed ad dollars to social platforms, despite the well documented and persistent risks around negative adjacency and ad fraud.

“Facebook hopes to regain the initiative with its Watch platform, which is being positioned as a safe brand environment offering advanced audience segmentation.”

Global media analysis: A round-up of online video

  • 17.1% online video’s share of all daily media consumption by 2020
  • 17.5% online’s share of global video advertising spend this year
  • 46.7% online’s share of total daily video consumption by 2020
  • 58.0% marketers in EMEA intending to use mobile video in their campaigns this year
  • 81.2% online video spend directed towards social platforms in the UK last year
  • 84.0% influencers’ share of YouTube views in Q1 2018

Other new key media intelligence on WARC Data

  • AT&T aims to get personal after $1.6bn AppNexus acquisition
  • Branded content set to become core to mobile marketing
  • Print display ad revenue rises for the first time in seven years

Global Ad Trends is part of WARC Data, a dedicated online service featuring current advertising benchmarks, data points, ad trends and user-generated expanded databases.

Aimed at media and brand owners, market analysts, media, advertising and research agencies as well as academics, WARC Data provides current advertising and media information, hard facts and figures – essential market intelligence for ad industry related business, strategy and planning required in any decision making process.

WARC Data is available by subscription only. For more information visit https://www.warc.com/data

About WARC – your global authority on advertising and media effectiveness
WARC.com is an online service offering advertising best practice, evidence, insights and data from the world’s leading brands. WARC helps clients grow their businesses by using proven approaches to maximise advertising effectiveness. WARC’s clients include the world’s largest advertising and media agencies, research companies, universities and advertisers.

WARC runs two global and two regional case study competitions: WARC Awards, WARC Media Awards, WARC Prize for Asian Strategy and WARC Prize for MENA Strategy.

WARC publishes three global rankings of advertising excellence: Gunn 100 (creativity), WARC 100 (effectiveness), Gunn Media 100 (media excellence) and the Journal of Advertising Research. In addition to its own content, WARC features advertising case studies and best practices from more than 50 respected industry sources, including: ARF, Effies, Cannes Lions, ESOMAR and IPA.

Founded in 1985, WARC has offices in the UK, U.S. and Singapore. In June 2018, WARC was acquired by Ascential plc, the global specialist information company.

About WARC Data – a global advertising trends, benchmarks, data points and database service
WARC Data provides current advertising and media information, hard facts and figures – essential market intelligence for ad industry related business, strategy and planning required in any decision making process.

Core features of WARC Data are:
Benchmarks: improve campaign performance using planning and measurement benchmarks
– ROI Calculator: compare campaign ROI with WARC case studies database
– Media Allocation: plan campaign budgets using media splits from successful campaigns
– Ad/Sales Ratios: advertising/sales ratios for 200 SIC-coded US industries

Data Points: Takeaway charts and data on media spend, costs and consumption
– New series of chart-led data articles bringing clients the most reliable stats on a given topic
– Delivered via search results and topic update emails
– Download the chart in PPT and/or the data in Excel directly from the article
– Articles are updated on a rolling basis throughout the year and can be saved in “My WARC”

WARC Reports:
– Global Ad Trends: a monthly report digesting the latest insights and evidenced thinking from the global
advertising industry
– The Global Marketing Index (GMI): a monthly barometer of marketer sentiment towards trading conditions,
budgets and staffing levels on a global and regional level
– State of The Industry: Mobile Marketing: results from exclusive surveys by WARC and the Mobile Marketing
Association into brands’ use of mobile around the world
– Media Consumption overviews: market-specific consumption trends for 36 countries

Extensive Databases:
– International adspend forecasts for 12 key markets by medium and ad format
– WARC’s adspend database holds advertising spend figures in 96 countries back to 1980
– Media Costs database monitors CPM and cost per 100 GPRs in 68 countries, by medium and target audience

WARC Data is available by subscription only. For more information visit https://www.warc.com/data

Rise of mobile drives advertisers to invest $30bn in online video despite ongoing risks

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