Global Economy

Global growth in ad spend on video-on-demand is outpacing traditional media

Paid-for search advertising on platforms such as Google is set to grow 11.8 percent to $103 billion, while online display ads are set to grow 14.8 percent to $68.1 billion worldwide.

Services like Netflix have increased people’s desire to watch shows anytime and anywhere, but as they don’t carry ads, brands will increasingly look to other video-on-demand platforms to reach audiences with advertising, according to WARC’s Data Editor James McDonald.

“This is why AT&T and Amazon are exploring moves into the AVOD (ad-funded video-on-demand) sector next year, with the ultimate aim of taking the lion’s share of a market expected to be worth $47bn by 2023,” he said in a statement emailed to CNBC.

Hundreds of thousands of U.S. households have “cut the cord,” or canceled their cable TV subscriptions, and 59.5 million homes used video-on-demand services as of April 2018, up 17 percent year-on-year according to comScore data. Seventy-three percent of homes using video-on-demand subscribe to Netflix, 50 percent use YouTube, 36 percent subscribe to Amazon Prime and 28 percent use Hulu.

As well as being a big spender on ads within video-on-demand shows, China is also spending a lot on TV programs, according to August data from IHS Markit. China is now the world’s second-highest spender on television shows after the U.S., with its annual expenditure hitting $10.9 billion in 2017.


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