Madison Avenue has long been able to stuff some $70 billion annually into TV commercials. Now the advertising industry is trying to figure out how much of that money it can put down on streaming video.
Streaming will account for 60% of all video viewing in 2020, compared with 56% in 2018, and is poised to account for 70% in 2024, according to a new report from Interpublic Group’s Magna media-research unit and IPG Media Lab. The study projects that 11 million more over-the-top devices will be sold in 2020 than this year. The study suggests 2020 will serve as a moment when “streaming fully takes over linear TV as the dominant mode of video consumption for some audiences.” And it predicts consumers will quickly consolidate their trust in “a small number of brands” rather than an expanding array of new players.
That puts blue-chip advertisers like Procter & Gamble and PepsiCo in an intriguing bind. The new services have yet to embrace traditional advertising, relying instead on marketing partnerships, reduced commercial loads and new techniques like “pause ads.” But advertisers will be pressed to reach video consumers as they migrate away from the day-and-date TV schedule that has long been their favorite home.
At Pivotal Research, analysts “expect that the weaker ratings could cause an incremental influx to connected TV/online video and broader online advertising at the expense of linear TV in 2020,” says analyst Michael Levine of Pivotal Research Group, in a research note published earlier this week.
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