Global online video viewing is expected to rise 20 percent this year, according to Zenith’s third annual online video forecast.
Consumers are spending an average of 47.4 minutes a day watching videos online, up from 39.6 minutes in 2016, the agency found. This will be driven by a 35 percent increase in mobile video watching to 28.8 minutes a day, versus the nearly flat 2 percent growth for fixed devices.
Zenith's report covers 63 key markets, up from 57 last year.
As a result of this growth in online video watching, adspend is expected to grow in tandem by 23 percent this year.
Zenith forecasts that global expenditure on online video advertising to grow 23 percent in 2017 to US$27.2 billion, up from US$22.2 billion in 2016.
Annual growth peaked at 37 percent in 2014, and has since fallen gradually as online video advertising has grown in scale, noted Zenith's report.
"We forecast 21 percent growth in 2018, and 17 percent growth in 2019, when online video ad expenditure will reach US$38.7 billion," said the report.
This means by 2019, online video will account for 31 percent of total expenditure on digital display advertising, up from 28 percent in 2017, and 21 percent in 2012.
At present, most adspend in this space still goes to fixed devices. But Zenith estimates that global fixed video ad spend will be US$15.2 billion this year, compared to mobile video at US$12 billion.
"Videos viewed on fixed devices are displayed on larger screens, and often in less distracting environments, than those viewed on mobile devices. They are more effective at conveying brand messages, and so command a price premium from advertisers," the report said.
By next year, though, that will no longer outweigh the higher volume of mobile video viewing, and mobile video ad spend – at US$18 billion – will overtake fixed video.
"Online video is one of the fastest-growing channels of advertising, triggering heavy demand from brands for high-quality content," Jonathan Barnard, head of forecasting and director of global intelligence at Zenith. "Video platforms that can capture the attention of the most consumers with the best content will reap the highest rewards."
However, online video is best used by brands to engage with consumers as individuals, not demographics, which is where TV comes in, according to Vittorio Bonori, Zenith’s global brand president.
"Television and online video work well together as complements, the former offering reach and shared experiences, and the latter offering targeting and personalisation," Bonori added.