Digital Video Advertising Continues to Expand

The two core areas of digital video monetization—advertising and subscriptions—remain on aggressive growth trajectories. Revenue in the US is up across the board and forecasts call for continued increases, as explored in the new eMarketer report, “Q1 2016 Digital Video Trends: Monetization, Audience, Platforms and Content,” the latest installment in an ongoing series of quarterly video ecosystem overviews.

Cowen and Company survey data published in Q1 2016 shows significant growth expectations for digital video ad spending. On a dollar basis, US digital video ad spending is predicted to reach $28.08 billion in 2020, up from $9.90 billion in 2016.

These figures will make video the fastest-growing category on mobile, on desktop and overall from 2016 through 2020. Video’s growth will outpace that of social, and even as growth starts to trail off toward the end of the forecast period, it will stand at over 20%, according to Cowen. Mobile video will outpace desktop, but even desktop video spending growth will stay in the double digits as other desktop categories sink to either single-digit or negative growth territory.

[Note: Cowen and Company considers social as “a type of provider” as opposed to a discrete ad format, according to information shared with eMarketer. Its social ad spending figures include display but not video advertising.]

Video will also grow as a percentage of US ad buyers’ digital budget allocations, according to Cowen. In 2016, video will account for 19.7% of spending, compared with 17.7% in 2015. Social will also grow, while search stays flat and display trends downward.

YouTube will remain the top ad-based video platform in the US through at least 2017, Cowen expects, with a 38.2% spending share. However, YouTube’s share, as well as that of its parent, Google/DoubleClick, will inch downward as Facebook and its Instagram unit gain traction.

eMarketer corporate subscription clients can view the full report here.

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