TBI Tech & Analysis: Exploring the booming online video ad market

Revenues from the global video advertising market are expected to grow by more than 70% over the next four years, fuelled in part by adaptable broadcasters and AVOD. Research powerhouse and TBI sibling Omdia explores how this huge market is set to change.

Global online video ad revenues will grow from $70bn in 2020 to reach $120bn by the end of 2024, providing huge opportunity for those operating across the sector.

Driven by the post Covid-19 online video consumption surge that is here to stay, video (including in-stream and out-stream), will account for 52% of online display advertising revenue by the end of 2024, growing from 47% in 2020.

Broadcast growth

Facebook and YouTube accounted for 49% of online video ad revenues in 2020. Toward the end of the forecast period, the duopoly’s combined share will increase slightly to 51%. Meanwhile, broadcast groups will seize greater control of online video ad revenue with total share growing from 13% in 2020 to 17% by the end of 2024.

During the same period, other video platforms’ share will shrink from 38% to 32% because of market consolidation.

Incumbent increase

Facebook and YouTube are the largest single online video players. Omdia estimates Facebook online video ad revenue of $17bn in 2020, with most of it coming from out-stream video ads. YouTube’s video ad revenue was $15bn during the same time, all of which were in-stream video ads via the website and app. The two platforms continued to report growth in revenues despite the pandemic’s hit to the economy, and Omdia expects sustained growth through the forecast period.

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AVOD & broadcast surge

Broadcast groups generated $8bn online video ad revenue in 2020 and Omdia expects this to grow to $19bn by the end of 2024, bolstered by broadcasters’ investments in developing their own video platforms and reduced reliance on YouTube and Facebook.

The next few years will also see AVOD services’ rise to prominence. However, consolidation is inevitable, and as this happens, Omdia expects broadcast groups, having established their presence in the AVOD space, to gain shares at the expense of other video platforms.

Media giant-owned AVOD platforms such as Pluto TV, Tubi, and Peacock will spearhead the shift to a direct-to-consumer revolution and increase their worldwide footprints.

Lat Am, CEE & Asia potential

North America accounted for 60% of worldwide revenues in 2020. Omdia forecasts Latin America & the Caribbean, Eastern Europe, and Asia & Oceania to be the fastest growing regions between now and 2024, with their combined share growing from 26% in 2020 to 29% by the end of 2024, while North America’s and Western Europe’s shares will shrink slightly to 59% and 12%, respectively.

The excerpt above comes from Omdia’s extensive recent report, ‘Global Online Video Advertising Report, 2020’ – next week we will explore how revenues in a variety of major markets are set to change.

The Global Online Video Advertising Report, 2020 was written by: Kia Ling Teoh, senior analyst for TV, video & advertising; Matthew Bailey, senior analyst for digital content & advertising; Tony Gunnarsson, principal analyst for TV, video & advertising; and Marija Masalskis, senior principal analyst for TV, video & advertising.

OMDIA is the global research powerhouse which, like TBI, is part of Informa.