Interviews, insight & analysis on digital media & marketing

Video entertainment ad spend stable for 2020 as online media brands vie for audience

Despite forecasts that advertising-spend will dip internationally as a result of the spread of Covid-19 and the impact it is having on businesses and economies, spend around video entertainment is set to remain stable according to a new industry forecast, however long-term recovery will not be a smooth process.

With out-of-home and cinema spend being heavily impacted this year with lockdown meaning fewer people were unable to travel or leave their homes, digital spend rose year-on-year as a result, the forecast explains.

With online media fighting for a captive and content-hungry audience, video entertainment brands are expected to see a fall in advertising spend of just 0.2% in 2020, according to Publicis-owned media agency Zenith and its Business Intelligence – Video Entertainment report, as over half (57%) of spend by video brands focused on digital advertising.

Covid consumer demand

The increase in demand from customers for content and online services due to the physical restrictions placed upon them resulted in online video brands increasing their spend as competition for audience grew; in the US, spend by online video brands rose by 142% compared to the previous year,  while in the UK their spend rose by 15% and traditional television spend grew by 34%.

This rise will not be sustained however, the forecast claims as their revenues are impacted by falling advertiser spend through their channels, but media brands have recognised an opportunity to build viewer loyalty in the early stages of the virus spreading, especially for the newer online video brands, especially with the launch of Disney+ and the short-lived Quibi.

The future is not expected to be as robust for video entertainment spend over the coming two years though, as Zenith believes there will be no growth for the next year, and only 1.3% in 2022. 

“Consumers are now faced with a vast and confusing array of programmes and films vying for their attention,” said Christian Lee, Global Managing Director, Zenith. “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.”

Mobile drives global spend

The greatest year-on-year growth in video entertainment advertising-spend came from Spain (27%) and India (19%) it was discovered due to their growth in smartphone use for video-on-demand content, while the US is expected to see a decline of 5% and Australia a decline of 7%. The US is the only market cited in the report to continue to see a decline in advertising-spend for video entertainment after 2020 too.

Last week, a UK-based advertising-spend report from the Advertising Association and Warc revealed that recovery would skip 2021, with spend for the fourth quarter of 2020 forecast to fall by £3.9bn – however those numbers were released prior to Prime Minister Boris Johnson’s latest announcement of an English four-week lockdown in November, set to further harm the economy for the nation as it enters the all-important Golden Quarter.

News

More posts from ->

Related articles

Strategy

Gen Z and Millenials turned off by ‘questionable’ content 

We know that misaligned content erodes the impact of ads, leading to decreased impact on metrics like purchase intent, for example. But, what about the content in the grey area? MAGNA and Channel Factory have researched the issue…