Pandemic-Driven Demand Bolsters Video Entertainment Ad Spend

Video entertainment advertising will shrink by just 0.2% in 2020 across ten key markets this year, outperforming the 8.7% drop for the ad market as a whole, according to new research from Zenith.

This resilience of video entertainment ad spend during a global pandemic and subsequent recession is the result of increased demand from consumers, increased supply of content, and intense competition among video brands for viewers. Zenith defines ‘video entertainment’ as long-form video content, supplied either by conventional television or online, including free TV, pay-TV and online video-on-demand platforms.

Ad spend by online video brands has far outpaced traditional television recently. In the U.S., for example, online video brands increased their ad budgets by 142% in 2019, while television brands only increased their spending by 15%. UK’s online video ad spend versus TV ratio was 79% vs. 34%.



However, Zenith points out television broadcasters and pay-TV platforms may have pushed up spending temporarily in response to their new competition in these two markets, but this will prove unsustainable in the face of ongoing decline in their revenues, both COVID-19-related and structural.

In fact, the U.S. is the only market where video entertainment ad spend is expected to continue to decline after 2020, as rising online revenues fail to compensate for the ongoing declines in TV advertising and pay-TV subscriptions, reducing available ad budgets.

“Video brands need to cut through this complexity and give consumers entertainment that matches their personal preferences with minimum fuss,” states Christian Lee, Global Managing Director, Zenith. “Brands that provide compelling experiences and act as more than just repositories of content will be best positioned for growth in the long term.”



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