As online video consumption continues to climb, advertising budgets have swelled to match.
Much of that action happens on YouTube, which owns a huge chunk of the digital video ad market, but probably won’t capture much more in the coming years. It’s an exciting market for publishers, which are looking to counter declining display ad rates. The rise of programmatic buying also has enthused budget-savvy brands and agencies, and video publishers are slowly coming around to embrace the new tech.
Here’s what the market looks like today — and how it will take shape in the years to come.
The digital video ad market will grow faster in 2014 than future years.
The U.S. digital ad spend will grow to $5.9 billion this year, up 56 percent from 2013, according to eMarketer data released last week. But that growth will cool in future years, declining to 13.9 percent by 2018, when the total digital video spend will reach $12.82 billion, eMarketer forecasts.
The research firm cites two trends to explain the dwindling growth. The first: proliferation of premium subscription services like Netflix or Amazon Prime Video, which don’t serve ads. The second, less obvious factor: the growth of mobile video. Mobile video consumption has surged 532 percent since 2012, according to video technology specialist Ooyala. But mobile videos tend to be shorter, and have shorter, less expensive ads accompanying them, so that sector actually suppresses the overall market, eMarketer reasons.