TV advertising budgets cannibalized by digital
Global advertising revenue from online video doubled to $11.2
billion between 2011 and 2014, and will jump to $13.8 billion in
2015, according to findings released today from IHS Inc. (NYSE:
IHS), the leading global source of critical information and
insight, and award-winning video analytics company Vidiro.
“Online video advertising is exploding,” said Eleni Marouli,
senior analyst, IHS Technology. “Video has become a fixture in
media plans as advertisers are familiar and happy with its
format.”
Advertising is the principal mechanism of monetizing online
video, generating more revenues than subscription or transactions,
according to the IHS and Vidiro white paper.
IHS forecasts that by 2017, online video advertising revenues
will reach $19 billion, with TV advertising budgets beginning to
see cannibalization by digital in some markets. TV will make up
only 28 percent of total advertising in Western Europe at that
time.
The changing structure of online video: re-defining
television
TV is taking a hit from online and on-demand video. In 2013, TV
(also known as linear viewing) declined by seven minutes per
person. In contrast, online video services have seen impressive
growth and increasing viewing share in the past two years, with
YouTube’s numbers showing a 50 percent growth in hours watched,
year on year.
The structure of the online video market is changing rapidly as
well. As online content consumption grows, content production is
also increasingly moving online. Technology companies, who
traditionally focused on improving ad formats to increase their
revenues, are now investing heavily in content to compete for TV ad
budgets.
“YouTube leads the pack by combining a content strategy with an
aggressive advertising strategy,” said Anna Stuart, senior analyst
at IHS Technology. “YouTube advertising revenue in 2014 amounted to
$4.2 billion, up in double digits from 2013.”
Programmatic buying and selling is rapidly taking hold of video,
the white paper says. Paired with data and measurement standards,
programmatic advertising is improving effectiveness and efficiency
of the transactional process, as well as measurement, attribution
and optimization.
Facebook is significant threat to online video
publishers
In 2014, Facebook surpassed YouTube as the leader in online
video impressions. “Despite its late start into video, Facebook
will be a significant threat to online video publishers for ad
revenue,” Marouli said. “We forecast that it will account for 25.7
percent of all online video ad revenue by 2018.”
Facebook has one of the strongest video strategies both in terms
of content and monetization, according to the IHS white paper. It
is working closely with premium publishers to distribute content
and is expanding its video ad solutions to provide strong format
and targeting capabilities.
A new approach to measure Multichannel Networks
(MCNs)
Since online video is here to stay, understanding how it
performs is crucial. Vidiro curates YouTube inventory to collect
detailed information on the top 1.5 million performing channels,
including the MCN affiliation for each.
The database stores all data relating to views, subscribers and
audience engagement for these 1.5 million channels containing 122
million videos and is updated daily and hourly for the top
performing segments, providing a MCN ‘fingerprint’. Using the
wealth of data available from YouTube, the Vidiro MCN ‘fingerprint’
offers a more comprehensive and comparable way to measure the
audience share of an MCN across the whole YouTube universe. It
offers a quick way to evaluate MCN performance, scale and structure
to competitors and peers.
“Stylehaul’s share of views in the top 10,000 YouTube channels
is 10 percent of Vevo’s,” said Simon Factor, CEO of Vidiro. “But
they compete strongly with Vevo across the long tail in terms of
subscriber growth, picking up one subscriber for every two Vevo
gains.”
Such a statistic demonstrates a high level of engagement amongst
Stylehaul fans, but it also points towards differences in how fans
consume beauty versus music videos. Due to the music playlisting
feature on YouTube, users rely on auto-play and are less inclined
to click and subscribe on individual music channels.
About IHS Technology’s Advertising Media Intelligence
Service
IHS Advertising Media Intelligence Service provides its clients
with a holistic and global view of a rapidly evolving advertising
and marketing landscape. Developed and maintained by a team of
expert analysts, it offers accurate, continuously updated market
data, forecasts and reports that give our clients deep perspective
on a dynamic advertising market. As the only global product that
offers the same detail and scope for both established and emerging
media we provide a unique, independent and objective view.
About IHS Technology’s TV Programming Intelligence Service
IHS TV Programming Intelligence Service is the only service of
its kind, providing necessary information for anyone who needs to
make crucial decisions in the global TV programming arena. Managed
by a dedicated team of TV analysts in Europe, the US and Asia, it
addresses the needs of major studios, producers and distributors;
broadcasters; channel providers and packagers; platform operators;
technology providers; regulators; investors and financial
institutions.
About IHS
(www.ihs.com)
IHS (NYSE: IHS) is the leading source of insight, analytics and
expertise in critical areas that shape today’s business landscape.
Businesses and governments in more than 150 countries around the
globe rely on the comprehensive content, expert independent
analysis and flexible delivery methods of IHS to make high-impact
decisions and develop strategies with speed and confidence. IHS has
been in business since 1959 and became a publicly traded company on
the New York Stock Exchange in 2005. Headquartered in Englewood,
Colorado, USA, IHS is committed to sustainable, profitable growth
and employs about 8,800 people in 32 countries around the
world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2015
IHS Inc. All rights reserved.
About Vidiro
(www.vidiro.com)
Vidiro is an international award winning video analytics
company, specialising in advertising technologies. VIDIRO’s PERFORM
platform technology offers reliable, accurate and consistent ad
tech solutions that provide ad buyers and brands clarity on how to
maximise their online advertising campaigns. The company is based
in Dublin, the heart of Big Data Analytics research, with offices
in London, the heart of Big Advertising.
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IHS Inc.Amanda Russo, +44 208 276
4727amanda.russo@ihs.comorPress Team, +1 303 305
8021press@ihs.comFollow @IHS_News
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