• PwC: U.S. Online Video Advertising Will Double By 2018, To $6.8 Billion

    PwC released its Entertainment & Media Outlook for 2014-2018 yesterday, forecasting that online video advertising in the U.S. will hit nearly $6.8 billion in 2018, more than double the projected 2014 level of $3.3 billion.

    PwC sees video advertising as achieving a 19.5% compound growth rate from 2013-2018, trailing only mobile Internet advertising, forecast at 22.1% CAGR. Video advertising's share of all wired Internet advertising is projected to jump from 8.7% in 2014 to 14.5% in 2018.

    PwC ascribes the expected increases in video advertising primarily to audience growth. The firm sees video advertising as a "lean-back" experience, with advertisers mainly using it for top-of-funnel branding rather than specific lead generation. It also expects programmatic to gain and for emerging technologies to combat viewability issues.

    When it comes to TV advertising, PwC expects a more modest 4.9% compound growth rate from 2013-2018, to $83.6 billion. No surprise, PwC highlighted the challenge of ad-skipping on DVRs, and also the opportunity being created by advanced advertising (targeting, personalization) along with new second screen behaviors.

    More broadly, while PwC sees U.S. pay-TV subscribers growing to nearly 108 million by 2018, it sees overall penetration dropping to 77% as more viewers rely on broadcast-only and/or OTT options, which PwC believes will become more disruptive going forward. This is due to interest among millennials, continued improvements to OTT services and the emergence of alternatives like Aereo.

    (Note: The VideoNuze Online Video Ad Summit is less than 3 weeks away, on Wed., June 25th in NYC. For a deep-drive into all the hottest video ad industry topics, register now!)


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