Forrester: Video ad spending will hit $103B by 2023
- Online video viewers will exceed 200 million in 2018, while TV audiences will reach 258 million, according to Forrester's new Video Advertising Forecast provided to Marketing Dive.
- Video ad spending is also expected to grow from $91 billion in 2018 to $103 billion by 2023. The total share of video ad spending will increase from 21% in 2018 to 34% in 2023. The study notes that while display video will account for 82.7% of online video ad spending this year, the pace of growth for social video is fast, with a 20.8% compounded annual growth rate through 2023.
- TV Everywhere is expected to grow from 89 million users in 2018 to 111 million in 2023, while virtual multichannel video programming distributor users will grow from 24.2 million this year to 44.3 million in 2023.
The new Forrester research underscores how marketers are continuing to shift their digital marketing budgets toward video as viewership increases. The need to diversify spending toward video has been a long time coming as people grow accustomed to watching programming on their own time and on the platforms and devices of their choice.
Online video streaming is especially popular among younger consumers like Gen Zers, as members of the generation report spending 4.2 hours per week streaming content, according to MNI Targeted Media. Gen Zers, more so than other generations, also don't mind seeing ads to learn about new products as long as the ads are relevant, per MNI's findings.
This sentiment is in line with another key finding of the Forrester research, which shows that two-thirds of viewers don't mind watching video ads to access free content. Seventy-two percent of those polled said that they would rather watch shows on TV that contain ads immediately than wait for an ad-free version.
Ad-supported, free online video is booming, with nearly 194 million people watching in 2018. However, marketers may want to capture that audience now, as Forrester predicts that consumers' tolerance for video ads will wane, while paid streaming will accelerate.
Forrester's findings additionally help signal why marketers have been boosting their investments in channels like advanced TV. Fifty-eight percent of marketers are investing in over-the-top or connected TV, 44% in programmatic linear TV, 40% in addressable TV, 35% in data-enabled linear TV and 32% in set-top box VOD, according to Advertiser Perceptions' 2018 Video Advertising Convergence Report.
However, Advertiser Perceptions also found that many marketers poorly blend their digital video and TV strategies: Just 53% of respondents plan the two strategies together, and only 40% buy bundles from multichannel providers.
- AdAge Ad-supported Netflix could be around the corner
- MediaPost Communications Ad-Supported Tier Of CBS All Access Launches On Amazon Channels