« Back to Posts

television viewing magisto Ericsson studies

As On Demand Overtakes Linear, Advertisers Jump on DIY Video

Two new studies suggest the rapid changes already underway in the business of video are only accelerating. The question for companies is where they’ll fit in as audiences head online and in turn onto mobile.

As video on demand grows, advertisers will increasingly need to find ways to control their own destinies, rather than rely on traditional outlets to reach the new audiences, and meet their viewing expectations.

action sports snowboarding We’re already seeing significant evidence of the shift, according to a study of more than 500 marketing decision makers by Magisto. The study projected that businesses will spend $135 billion on online video this year, nearly double what they’ll spend on TV ads and more than 50 percent higher than digital ad spending.

Separately, an Ericsson study projects that, by 2020, video on demand will command about as big an audience as traditional linear TV. Also of note, that combined audience is watching more TV than ever. With more good options than ever, people are spending more time watching both traditional television and its digital variants.

The rise of VOD, especially when it’s more like ad-free Netflix than the Pay-TV variants with unskippable ads, represents a foundational shift in how television is done.

Accordingly, Magisto says, we’re also shifting from an era of branding, an era that has been dominated by agencies and ad spots, to an era of “belonging.” In this new environment, engagement is everything. Marketing through social media and branded/native content, with experiences the consumer controls and even seeks out, will be increasingly important to telling the story about a company to potential consumers.

And already, companies are adapting by creating more and more video of their own (60 percent of those surveyed spend at least a quarter of their budget on video), and nearly two-thirds are creating it in-house rather through an agency. More than half the companies surveyed are creating video content at least weekly.

The real opportunity is mobile, where marketers are heading in droves. And that’s because audiences are heading there too. By 2020, the Ericsson study projects, about half of all viewing, whether linear or VOD, will come on mobile.

That has implications for some of the most basic questions in producing video content, like whether it should have mobile’s vertical orientation or traditional screens’ horizontal one.

The lower cost of production for mobile ads might further hasten the move here, as brands seek to stretch their dollars in a difficult retail environment.

Also of interest, now that both Apple and Google have released tools to make it easy to create augmented-reality apps, is whether that opportunity (perhaps combined with 360-degree virtual-reality experiences) can further accelerate the move to mobile.

According to Ericsson, nearly one in three consumers expect they will be watching VR by 2020, news that must hearten struggling software and hardware makers in the slow-to-ignite sector.

According to Ericsson, TV viewing (in its broadest definition) has hit a historic high, 30 hours per week, fueled by use of VOD services, which have more than doubled since 2010, to an average 3.8 hours a week.  The Ericsson study is based on more than 20,000 interviews in a dozen countries.