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Why marketers are still preferring to spend on fixed devices over mobile

Mobile devices are set to overtake ‘fixed devices’ as a main platform for viewing online videos. Yet majority of expenditure on online video still goes to fixed devices.

According to a recent study by Zenith titled Online Video Forecasts 2016 consumers around the world will spend an average of 19.7 minutes a day viewing online videos via mobile, comprising of smartphones and tablets. This is compared to fixed devices such as desktop computers and smart TV sets at 16.0 minutes. Yet, fixed video ads are still estimated to account for 68% of all online video advertising this year.

“Only from 2018 will it be expected that mobile advertising will equal fixed, this is due to the notion that video ads are more engaging and effective on larger screens, hence advertisers will continue to pay a substantial premium for fixed video ads,” said the study. However, the number has dipped from 75% last year.

The study added that 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.

Online video advertising complements television

Meanwhile, spending on online video ads has also gone up to US$17.5 billion in 2015, up from US$13.4 billion in 2014. Online video adspend is forecasted to grow at an average rate of 19.8% a year, reaching US$30.1billionn in 2018.

The study also noted that brands are increasingly treating online videos as a complement to traditional television rather than a competitor. It adds incremental reach to TV campaigns, especially among the youth and more affluent heavy users of online video.

The study has also noted that advertisers tend to reuse their television ads in smaller markets despite it not being the most effective way of using online video. Online video ads normally work better when they are shorter than traditional 30 second spots.

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 study also referenced previous Advertising Expenditure Forecasts reports, with television and online video 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%.

The study is Zenith’s Online Video Forecasts 2016, and is currently its second edition of the report which is published annually. This year’s edition covers 57 key markets.

 

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