Online Video Advertising Revenue Doubles in Three Years, Says IHS and Vidiro

LONDON–(BUSINESS WIRE)–Global advertising revenue from online video doubled to $11.2 billion
between 2011 and 2014, and will jump to $13.8 billion in 2015, according
to findings released today from IHS Inc. (NYSE: IHS), the leading global
source of critical information and insight, and award-winning video
analytics company Vidiro.

“Online video advertising is exploding,” said Eleni Marouli, senior
analyst, IHS Technology. “Video has become a fixture in media plans as
advertisers are familiar and happy with its format.”

Advertising is the principal mechanism of monetizing online video,
generating more revenues than subscription or transactions, according to
the IHS and Vidiro white paper.

IHS forecasts that by 2017, online video advertising revenues will reach
$19 billion, with TV advertising budgets beginning to see
cannibalization by digital in some markets. TV will make up only 28
percent of total advertising in Western Europe at that time.

The changing structure of online video: re-defining television

TV is taking a hit from online and on-demand video. In 2013, TV (also
known as linear viewing) declined by seven minutes per person. In
contrast, online video services have seen impressive growth and
increasing viewing share in the past two years, with YouTube’s numbers
showing a 50 percent growth in hours watched, year on year.

The structure of the online video market is changing rapidly as well. As
online content consumption grows, content production is also
increasingly moving online. Technology companies, who traditionally
focused on improving ad formats to increase their revenues, are now
investing heavily in content to compete for TV ad budgets.

“YouTube leads the pack by combining a content strategy with an
aggressive advertising strategy,” said Anna Stuart, senior analyst at
IHS Technology. “YouTube advertising revenue in 2014 amounted to $4.2
billion, up in double digits from 2013.”

Programmatic buying and selling is rapidly taking hold of video, the
white paper says. Paired with data and measurement standards,
programmatic advertising is improving effectiveness and efficiency of
the transactional process, as well as measurement, attribution and
optimization.

Facebook is significant threat to online video publishers

In 2014, Facebook surpassed YouTube as the leader in online video
impressions. “Despite its late start into video, Facebook will be a
significant threat to online video publishers for ad revenue,” Marouli
said. “We forecast that it will account for 25.7 percent of all online
video ad revenue by 2018.”

Facebook has one of the strongest video strategies both in terms of
content and monetization, according to the IHS white paper. It is
working closely with premium publishers to distribute content and is
expanding its video ad solutions to provide strong format and targeting
capabilities.

A new approach to measure Multichannel Networks (MCNs)

Since online video is here to stay, understanding how it performs is
crucial. Vidiro curates YouTube inventory to collect detailed
information on the top 1.5 million performing channels, including the
MCN affiliation for each.

The database stores all data relating to views, subscribers and audience
engagement for these 1.5 million channels containing 122 million videos
and is updated daily and hourly for the top performing segments,
providing a MCN ‘fingerprint’. Using the wealth of data available from
YouTube, the Vidiro MCN ‘fingerprint’ offers a more comprehensive and
comparable way to measure the audience share of an MCN across the whole
YouTube universe. It offers a quick way to evaluate MCN performance,
scale and structure to competitors and peers.

“Stylehaul’s share of views in the top 10,000 YouTube channels is 10
percent of Vevo’s,” said Simon Factor, CEO of Vidiro. “But they compete
strongly with Vevo across the long tail in terms of subscriber growth,
picking up one subscriber for every two Vevo gains.”

Such a statistic demonstrates a high level of engagement amongst
Stylehaul fans, but it also points towards differences in how fans
consume beauty versus music videos. Due to the music playlisting feature
on YouTube, users rely on auto-play and are less inclined to click and
subscribe on individual music channels.

About IHS Technology’s Advertising
Media Intelligence Service

IHS Advertising Media Intelligence Service provides its clients with a
holistic and global view of a rapidly evolving advertising and marketing
landscape. Developed and maintained by a team of expert analysts, it
offers accurate, continuously updated market data, forecasts and reports
that give our clients deep perspective on a dynamic advertising market.
As the only global product that offers the same detail and scope for
both established and emerging media we provide a unique, independent and
objective view.

About IHS Technology’s TV
Programming Intelligence Service

IHS TV Programming Intelligence Service is the only service of its kind,
providing necessary information for anyone who needs to make crucial
decisions in the global TV programming arena. Managed by a dedicated
team of TV analysts in Europe, the US and Asia, it addresses the needs
of major studios, producers and distributors; broadcasters; channel
providers and packagers; platform operators; technology providers;
regulators; investors and financial institutions.

About IHS (www.ihs.com)

IHS (NYSE: IHS) is the leading source of insight, analytics and
expertise in critical areas that shape today’s business landscape.
Businesses and governments in more than 150 countries around the globe
rely on the comprehensive content, expert independent analysis and
flexible delivery methods of IHS to make high-impact decisions and
develop strategies with speed and confidence. IHS has been in business
since 1959 and became a publicly traded company on the New York Stock
Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is
committed to sustainable, profitable growth and employs about 8,800
people in 32 countries around the world.

IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2015 IHS
Inc. All rights reserved.

About Vidiro (www.vidiro.com)

Vidiro is an international award winning video analytics company,
specialising in advertising technologies. VIDIRO’s PERFORM platform
technology offers reliable, accurate and consistent ad tech solutions
that provide ad buyers and brands clarity on how to maximise their
online advertising campaigns. The company is based in Dublin, the heart
of Big Data Analytics research, with offices in London, the heart of Big
Advertising.

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