Online video advertising to rocket to $780 million in 2019

Pippa Chambers
By Pippa Chambers | 29 October 2014
 

Online video advertising to rocket to $780 million in 2019

The Australian online video advertising market is predicted to grow from $198 million in 2014, to $780 million in 2019, according to a new report.

Frost & Sullivan's Australian Online Video Market 2014 study released the figures this week, along with stats that for the 12 months to June 2014, the online video advertising market grew by 60%, compared with 55% in the previous year.

The report found the proportion of online video ads traded programmatically in Australia as a proportion of the total ads traded, was also on the up. However, the majority of this trading is for non-premium inventory. Increasingly, ad agencies and brands are placing their online video inventory directly through ad exchanges, and some are building their own trading desks.

Senior research manager, Australia and New Zealand ICT Practice at Frost & Sullivan, Phil Harpur, said: "Several factors are stimulating consumption of online video in Australia. There is a higher and growing proportion of longer form content of all online video content watched, and a growing proportion is premium content such as movies or TV shows. Viewing patterns are being aided by improving data allowances from internet service providers, and a greater range of content availability from subscription video-on-demand (SVOD) providers."

News is the most popular type of content viewed on mobile devices with 21% of consumers watching it on most days, and a further 24% watch it at least once a month on average. Live broadcast programs such as sports and news are also gaining popularity.

Harpur said growth of online video advertising outperformed all other major online general advertising segments, including online display advertising.

He said uptake for local over-the-top (OTT) subscription video on demand (SVOD) services from providers such as Quickflix is modest, and global players such as Netflix have yet to formally enter the Australian market.

However, more local and international providers are expected to enter the SVOD market in 2015, and competition will increase. Foxtel recently launched its Foxtel Go and Foxtel Presto services, whilst Google recently launched its OTT Chromecast device in Australia.

As reported in AdNews this August, Nine and Fairfax will both invest $50 million each in the StreamCo joint venture and privately, execs have suggested the video streaming platform will commission its own programming, not just churn out Nine content. The SVOD service is expected to launch in the first half of 2015.

Harpur said online video content is now a “core part of the strategy” of many online publishers from both a content and advertising perspective.
“Local online news sites are incorporating more online video content and those produced by online publishers such as Fairfax Media and Yahoo7 continue to evolve,” he said.

Harpur stressed that there is still a lack of locally produced ad funded content. Australians view the majority of popular video content like music, gaming, sports, and movies from overseas websites.

“Due to a scarcity of video ad spots, video ad pricing for premium inventory, especially long form content, has increased significantly. However, non-premium ad rates are declining due to growing over-supply of ad spots in the market,” he said.

He said brands and ad agencies see video as an important part of the overall video and TV ad buying process, and as a way to extend the reach of FTA TV campaigns. The market is moving towards a complete solution for buying video across traditional TV broadcasting and online video channels.

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Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop me a line at pippachambers@yaffa.com.au

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