Viewers just can't seem to get enough of YouTube stars Jenna Marbles and PewDiePie. The average amount of time that people will spend consuming online video each day is projected to increase by 23.3% in 2015 and by an additional 19.8% in 2016, according to ZenithOptimedia's (ZO) Online Video Forecasts, a new report tracking global growth in video consumption.
Viewers are most likely to be watching these videos with their smartphones. Video consumption on mobile devices -- such as smartphones and tablets -- is forecast to grow by 43.9% in 2015, and 34.8% in 2016. In total, 52.7% of video will be viewed via mobile devices by 2016 and 58.1% in 2017 -- up from 22.9% in 2012.
"I was surprised to see that across the markets covered by the report, mobile viewing of online video is catching up with desktop and other devices extremely quickly, and mobile will be the main viewing channel next year," says ZO's Head of Forecasting Jonathan Barnard.
This growth varies by region. Twelve markets in particular, including China (27.2%), France (50.0%), Germany (27.5%) and the US (12.3%), are seeing regular online video viewers increase at double-digit rates.
With all of this screen time spent on phones, other screen time is being pushed aside. The number of people regularly watching traditional, linear TV (meaning sitting in front of their big screen) will peak this year, rising 3.1%, and will begin to decline for the first time in 2016.
Meanwhile, video consumption on non-mobile devices will continue to grow, although at more moderate rates, increasing by 9.5% in 2015 and 6.5% in 2016.
There is money chasing these eyeballs. Online video’s share of global digital ad spend has increased from 8.8% in 2012 to 10.2% in 2014; by 2017 ZO expects it to rise to 12.8%, an eighth of all internet ad spend.
Moreover, online video is the fastest-growing category of Internet advertising, with ZO forecasting it to grow by 28.9% to $16.1 billion in 2015, followed by 22.5% growth in 2016. In 2017, online video is projected to grow 19.7% to $23.7 billion.
The U.S. online video market is by far the largest at $8.5 billion in 2015, or 52.9% of the global total. Still, ZO expects other countries to catch up, dropping the amount of ad spend going to the U.S. to fall to just below half of the global total -- 49.9% -- in 2017. The U.S. joins Italy as the two markets with the highest proportion of total internet spend going to online video (16.5% each in 2015), followed by Taiwan (15.8%) and Latvia (13.0%).
“Consumers all around the world are rapidly embracing online video, because it offers them a near limitless array of engrossing content," says Mark Waugh, global managing director, Newcast. "Some of the keenest users are the young, affluent viewers who are hardest to reach on television. Brands are finding online video a particularly effective way to reach these valuable audiences, not just with advertising, but also with branded content; content that can inform or entertain consumers in a deeper and richer way than is possible with short, interruptive ads.”
This report was compiled by ZO in conjunction with Newcast, ZO Group’s global branded content network.