The Trends of Video Consumption As We Head Into Q2 2017

Online video has played a huge part of the Advertising efforts in the past few years. In fact in countries like the US where the proliferation of video platforms like Netflix and YouTube has increased manifold, we see that the spending on video ads have increased by leaps and bounds.

US spending on online video ads stands at a whopping $13.23 billion as we head into the latter half of 2017. And that spending is not going to slow down in the near future. In fact according to latest reports from E-Marketer, we find that the growth figures are at a double digit annual rate and will look to hit the $22.18 billion mark by 2021.

video ads

US spending on online video ads stands at a $13.23 billion.

So if these numbers have piqued your interest you must be wondering where do I invest my money in if I want to reap the same rewards out of this burgeoning media revolution. Well that may depend squarely on you audience. In fact the younger the audience the more likely that they are not interested in traditional video platforms like TV and are spending more of their time on online video consumption.

Among the online video platforms who are the forerunners? Well most results show that as far as paid subscriptions are concerned, Netflix holds a clear lead ahead of its competitors with a proliferation rate among both desktop and mobile users that is rivalled by no other. Turning onto the other big competitor in the free to watch segment, YouTube remains king especially when ad campaigns and Influencer Marketing is taken into consideration.

Online video has managed to grab the lion’s share of online traffic accounting for nearly 74% of all traffic in 2017. But as we have discussed many times in the past, getting views on a product doesn’t exactly translate to money in the bag. So how are the conversion metrics? Well, including videos on the landing page of a product can increase the conversion rate by as much as 80%. In fact, you don’t always have to even include a video in the literal sense, just including the word ‘video’ somewhere in the subject line has been found to make subscription email opening rates jump up by 19%.

But what about the downsides to video marketing? There are indeed a fair few of them and 43% of marketers have identified that money, time and resources are a constraint in the field of producing more video content. However, despite that, the overall perspective on video advertisements as a whole are changing as marketers see a revenue growth rate of 49% among users who consume video content. This has led to a change of thought where 52% of marketers believe that videos are the best method to increase their brand awareness.

With a userbase of over a billion users, platforms like YouTube have the eyeballs of over one-third of the entire audience on the Internet. And even newer platforms like Snapchat have immense potential with viewers watching over 10 billion videos daily! If online advertising is your niche, then there is no better moment than now to make the jump to video content!

Facebook to Give Video Creators 55% of Revenue from Suggested Videos

In an obvious attempt to lure video creators away from YouTube, Facebook will be offering many of them a share in the revenue that is generated from ads on or near their videos.  Starting this fall, video creators including the NBA, Fox Sports and Funny or Die, will receive a 55% cut of the ad revenue that appears on the social network on or near their videos.

YouTube has long been giving content makers a portion of the ad revenue, so this is somewhat of a game of ‘catch up’ for Facebook, but an important one none the less.  YouTube offers the same 55/45% revenue split.  The big advantage that Facebook will have is that it is actually growing much more rapidly in terms of generating video views.

Thanks to their auto-play feature and the massive popularity of the social network, many video creators will be able to get millions of views with fairly little promotion.  In addition, Facebook makes it easier for these videos to be seen by people who aren’t directly searching for them.  As videos get liked or shared by people on Facebook, the audience will naturally grow.  While there is some of that on YouTube, the bulk of videos are seen by people who are actually searching for a specific topic.

Video creators have been using Facebook in the past because it was an important tool for getting their videos seen by this huge audience.  This, however, will provide further incentive.  Dan Rose, VP of Partnerships at Facebook recently told Forbes, “Partners say they’d publish a lot more if they could get benefit of distribution but also make money.”  Of course, this is not really surprising.  Paying video makers to publish on your platform is an obvious way to increase the total number of videos being published.

How it will Work

The system will work when someone clicks on a video in the News Feed.  They will then see a suggested videos page, with a list of videos created by Facebook’s algorithm.  These videos will be similar to the original content, and will play automatically as the user scrolls through.  Unlike typical News Feed videos, which start off muted, these will play with sound since the user has already opted to hear it with the original video click.

The videos that are viewed on this suggested videos page will generate revenue for the publishers.  If someone watches multiple videos in one session, the revenue will be split based on the amount of time the user spends on each video.

Currently this system is still technically just in testing phase according to Facebook.  Assuming it is fully rolled out, many expect that the number of video creators that qualify for the program will grow significantly.  It is not yet clear, however, how marketers will be buying space on the Suggested Videos page.  For now, Facebook won’t be charging advertisers for these ads so that they can see how the system will work in a live system.