Mobile devices will overtake ‘fixed devices’ this year to become the main platform for viewing online video, according to the second edition of Zenith’s annual Online Video Forecasts 2016, published this month.

Consumers around the world will spend an average of 19.7 minutes a day viewing online videos on their mobile devices (smartphones/tablets), compared to 16 minutes on fixed devices (desktop computers and smart TV sets), the report said.

This represents a 39% leap for mobile on last year’s figures, when 14.2 minutes were spent viewing mobile video.

Fixed video consumption will be static this year, reflecting higher viewing on smart TVs counterbalanced by the viewing lost from desktops to smartphones and tablets.

Advertisers spent US$17.5 billion on online video ads in 2015, up from US$13.4 billion in 2014.

The report forecasts online video adspend to grow at an average rate of 19.8% a year, reaching US$30.1 billion in 2018. This will increase online video’s share of digital display adspend to 31.3%, up from 26.7% in 2015.

Online video (as well as social media) is rapidly taking market share from traditional banners, which are less effective and more disliked by consumers, particularly on mobile devices, the report said.

The rapid growth in mobile video consumption is being driven by the growing popularity of mobile devices, particularly low-cost devices in lower-income countries; the development of better mobile displays; and the spread of high-speed data connections, particularly 4G.

“We forecast mobile video consumption will grow 33% in 2017 and 27% in 2018, to reach 33.4 minutes a day. Mobile devices will account for 64% of all online video consumption in 2018.

Fixed video consumption will grow 13% in 2017 and 3% in 2018 to reach 18.7 minutes as smart TV viewing becomes more common.

Although most online video consumption is mobile, the majority of expenditure on online video advertising goes to fixed devices, and will continue to do so in 2017.

“We estimate that fixed video ads will account for 68% of all online video advertising this year, down from 75% last year,” the report said.

Zenith expects mobile advertising to equal fixed in 2018.

“Video ads are more engaging and effective on larger screens, so advertisers will continue to pay a substantial premium for fixed video ads,” the company says.

The report points out that “online video advertising complements television”.

“In many markets it is becoming common for brands to treat online video as a complement to traditional television, rather than as a competitor,” it says.

“Online video can add incremental reach to television campaigns, particularly among the young and well-off consumers who tend to be the heaviest users of online video,” it added.

Some brands have found success by using online video to provide extended content to interested consumers – by extending the story of the television campaign, for example, the report says.

It also points out that online video ads “normally work better when they are shorter than traditional 30 second spots”. In smaller markets though, “advertisers often simply reuse their television ads... this is not the most effective way of using online video”.

Zenith also said television and online video were increasing their combined share of global display advertising (i.e. advertising expenditure across all media except digital search and classified). In 2015 television and online video accounted for 48.5% of global display, up from 43.8% in 2010, and by 2018 we expect them to account for 49.6%.

Published on 25 July 2016