Video entertainment advertising is forecasted to stabilise this year despite the pandemic’s hit to the overall market, according to Zenith’s Business Intelligence - Video Entertainment report.
The survey found that video advertising, covering free TV and video-on-demand platforms, will shrink by just 0.2% this year across 10 markets; Australia, Canada, Germany, India, Italy, Russia, Spain, Switzerland, the UK and US, which collectively account for 57% of all global ad spend.
This stability in video advertising is compared to an 8.7% drop across the ad market as a whole across the same countries.
Zenith says the resilience of video entertainment ad spend during the pandemic is the result of increased demand from consumers, increased supply of content and “intense” competition. In Australia, players such as Netflix and Stan have recently been joined by Disney+, Tubi, and the soon to be rebranded Paramount+, as well as new mutlichannels from Nine and Ten.
“In Australia, streaming services are the main reason for this category’s growth in ad spend,” says Zenith Australia’s national head of investment Elizabeth Baker.
“The surge in demand, fuelled by being at home more throughout pandemic conditions, coupled with the direct-to-consumer release of titles has accelerated subscription, consumption and ad spend. It will be interesting to see what happens moving forward. This period has provided major players with an opportunity to experiment with direct-to-consumer versus theatrical release models.”
While the category is forecasted to outperform the ad market this year, Zenith expects it to underperform over the next two years, with no growth in 2021 and 1.3% growth in 2022, compared to overall advertising which will be 0.6% below its 2019 peak.
In 2022, video entertainment brands are forecast to spend 27% more than in 2019 in Spain, and 19% more in India. Meanwhile, spending is expected to decline by 5% in the US and 7% in Australia over the same period.
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