05.07.19

Preparing for the Rise of Digital Video

With over 70% of the US population watching digital video, many of whom spend nearly six hours a day with the medium, it’s a foregone conclusion that digital video has been cemented as the go-to way for people to spend time with digital.

To no surprise, the advertising world is responding. According to eMarketer, overall ad spending on digital video will surpass $22 billion by 2021. And while some of my contemporaries will say that the spending gap between digital video and traditional TV, which is estimated to be close to 65% today, proves that traditional TV will always dominate, the gap is expected to close to within ~16% by 2023. Reading between the lines, an industry that’s gone unimpeded for decades is in for some serious upheaval moving forward.

As a result of this shakeup, there are three major trends that advertisers need to prepare for:

The Emergence of 5G

Wireless 5G connectivity is coming to a screen near you, and while we expect a relatively limited number of 5G-connected devices will be available in 2019, it’s widely accepted that they’ll be available in abundance by 2020 when they’re expected to take off exponentially. Nevertheless, 5G already has serious implications for users and advertisers alike.

The immediate implication of 5G from a user perspective is the ability to watch digital video in 4K Ultra HD in a higher-quality environment where buffering will become a thing of the past. Net-net, expect an increase in adoption.

For advertisers, 5G is opening the door for higher quality videos and experiences, as well. For example, it’ll reduce the need to balance site experience with performance; even if the site is heavy with video and high-resolution content, it’ll still load instantly. 5G will also make way for more AR and VR experiences that create more immersive, more memorable moments.

While we wait for the world to catch up and take advantage of 5G’s possibilities, you’d be smart to remain apprised of the developments and stay at-the-ready to explore new interactive advertising formats as they become available.

Appealing to Consumers “On the Go”

With video being easier to transmit, it’ll become more prevalent, especially in the physical world—at bus stops, train stations, in cars, etc.—as advertisers try to reach people when they’re “on the go.”

Imagine this: You’re sitting in a taxi on your way to work. On the back of the seats, there’s a small TV. During your commute today, a series of pre-canned ads run, which serve their purpose but go largely unnoticed. With 5G, we’ll be able to take this a step further and make the advertising experiences relevant to each person. If you’re shopping for a Chanel bag, for example, you’ll see a relevant ad. If you’re planning your next vacation, you’ll see something that may influence that decision. You get the idea.

While this type of advertising, typically referred to as out-of-home (OOH) advertising, has been around for years, taking the form of billboards and other static mediums, the reality is that today there are far more opportunities for digital advertisers to scale their digital video advertising efforts in high-traffic, low-clutter environments.

The focus on OOH digital video advertising will continue to make a lot of sense as the market shifts to engaging consumers when they are on the go in public places. Combine that with 5G connectivity, and the world’s in for a truly personalized advertising experience.

New Digital Video Formats

There’s no denying that YouTube still collects the majority share of the digital video world from both users and advertisers. To put this in perspective, there are over 1.9 billion active users visiting YouTube each month, watching over 1 billion hours of video a day (114 thousand years).

But just because YouTube continues to shine, it doesn’t mean you should ignore emerging formats and technologies.

On the hardware front, collapsable phones are being built by all the big phone manufacturers, including Samsung and Huawei. Corning, the glass manufacturer that provides many of the biggest smartphone makers with Gorilla Glass, is even working on bendable version of that glass. Many pundits expect collapsable phones to immerse the market, providing futuristic ways to consume digital video content thanks to new rich media formats that take advantage of larger screens. Once this technology is widely adopted, we’ll see a wider array of ways to consume digital video via mobile devices.

As digital video reigns supreme, expect new services to pop up as well. Quibi, for instance, is on a quest to write the next chapter of the film narrative by creating a platform to share short-form, user-generated digital video on mobile. For Quibi, advertising implications aren’t immediately clear, but reports have the company planning to charge $5 a month for viewing with limited ads and $8 a month for an ad-free version.

The emergence of 5G as well as new services like Quibi and hardware like collapsable phones, digital video is well positioned to make an impact on the lives and minds of the digitally connected. As both eager startups and age-old institutions divert their attention away from traditional means, any advertiser, regardless of industry, vertical, or area of expertise, needs to redefine their strategy and address the emerging trends. Digital video now reigns supreme and there’s no getting around it.


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