International marketing intelligence service, WARC highlights in their latest report on the fall of advertising spend in broadcast television last year as the coronavirus paralysed production and brands slowly started shifting their money onto streaming platforms. The trends highlighted in the report mirror the evolving viewing habits of consumers today.

The linear TV market is eroding but is still two times larger than online video. While spend on linear TV formats is down by $47.1bn over the last five years, online video is has risen by $38.7bn. Online video –inclusive of AVOD, BVOD and short form social formats –has now risen to take a quarter of the global video ad market. The report highlights that it was one of the few formats to grow last year.
 

Three-quarters of the value of all online video ad trade has been generated in just the last five years, and future market prospects are bright. As the broadcast TV market ebbed last year, advertiser-funded video-on-demand (AVOD) services – including platforms such as Hulu, Peacock and YouTube – saw brand investment rise by 9.9% to a total of $26.7bn. Further, projections from Digital TV Research show that the AVOD market is set to double to a value of $54bn by 2025.

The 10th edition of WARC's Marketers Toolkit report stated that 70% of practitioners have intentions to increase online video spend in 2021 –the highest proportion among all media. These findings tally with the rapid growth for AVOD projected over the coming years. YouTube is set to be a key beneficiary. AudienceProject research shows one in three Americans see YouTube and TV as analogous –a quarte rof all YouTube viewing now occurs via a connected TV. IAS surveying shows that OTT and connected TV are high priorities among practitioners in the US for the coming year, particularly on the buy side.

CTV accounts for two in five streamed ad impressions. To top that, the completion rates of ads are nearly 100%, above an average of 84% across all devices. Part of CTV's allure for marketeers is the prospect of having data-driven audience targeting, being able to cap frequency and attribution visibility. All these factors help to better measure business outcomes. A Xandrsurvey found that by far the most important consideration for practitioners aiming to deliver a relevant ad experience is to reach the right audience, though few felt they were truly effective in this area.

Sharp rises in streaming were seen among establishedand emerging regions alike last year, and this was driven primarily by next gen TVs. Streaming time rose to 28.7 minutes per play on average. Chromecast received the longest watch time at 35.5 minutes, followed by Roku at 33.3 minutes. TVs accounted for three-quarters (75%) of all streamed video time in 2020, across CTVs (49%), smart TVs (17%) and consoles (9%).

"Consumers have never before had such a varied choice when it comes to how and where they watch video content, and the distinction between channels continues to blur – one in three Americans now regards YouTube and TV as analogous. Brands are taking note, with investment data showing a clear pivot to AVOD platforms last year. Like linear before it, next gen TV is demonstrating the core traits of offering mass reach for resonant creative in brand safe environments. However, unlike with its ancestor, fraud now poses a very real and present threat to advertising trade, especially among unverified vendors," said James McDonald, Head of Data Content, WARC.