After an uncertain spring, we have seen global video ad spend rebound in recent months. Spend is returning to pre-pandemic levels and, with some verticals, posting strong year-over-year growth. Video streaming viewership has remained high since the pandemic took hold, and is positively affecting traffic across all device types (mobile, desktop, connected TV) and all dayparts.
Consumers turned to streaming and online video content in their search for entertainment during stay-at-home orders this spring and they’ve been hooked ever since. The return of live sports plus the new offerings and content debuted by media owners have kept viewers engaged.
Now that viewership and spend growth have largely leveled out, the following trend analysis will provide strong guidance for planning during the remainder of 2020 and into next year.
Viewership is trending upwards across all devices and remains high after surging in March and April. Here are the categories where we’ve seen notable growth over last year.
While consumers are tuning into video more often on all devices, we see the most rapid growth occurring in CTV environments. The largest growth opportunity occurs during the late afternoon into evening hours.
Ad spend and pricing trends
Consumer spend has rebounded since the spring, even in some of the hardest-hit categories. Advertisers across industries have subsequently increased their budget, particularly on over-the-top (OTT) and CTV platforms where consumers spend increasing amounts of time watching video.
We’ve also seen effective CPM (eCPM) rates rebound to the point that they’re now surpassing 2019 rates. Advertisers will need to take this into account and adapt their bid strategies for Q4 and 2021 to remain competitive.
We analyzed the YoY growth on the SpotX platform in key advertiser categories:
Arts and entertainment
Streaming service and entertainment app spend is largely responsible for the increase, stemming from the launch of several new services and increasing viewership this year. Online sports betting has also contributed to the growth in this category, and has increased by 254% YoY.
Automotive spend decreased significantly earlier this year, but has bounced back in Q3. It is growing again and is expected to outpace 2019 by 8% due to consumers’ increased interest in cars since COVID-19 hit and their receptiveness to new online purchasing options.
Education spend has outpaced 2019 by 98%. Online learning and universities are driving the majority of the growth in 2020 due to the COVID-19 effect on the industry.
Health and fitness
This includes prescription medication and hospitals, which were the largest growing categories in the second half of 2019, and continued strong growth in 2020. Diet, nutrition, and fitness equipment categories are growing as well and have each increased by over 100% YoY.
Hobbies and interest
Video game and toy brands are on the rise as people look for new stay-at-home entertainment options. Spend in this category has increased by 55% YoY.
Retail spend has increased 55% YoY, with particularly high growth in the home improvement category. The 2020 holiday shopping season will provide a big bump in spend for the remainder of the year. This season started earlier than usual, and consumers are likely to spend as much or more than last year. Spend is likely to soften in Q1 of 2021 when the effects of pent-up demand and holiday shopping begin to level out.
Travel was one of the hardest-hit categories by COVID-19 and is down 52% YoY. While we haven’t seen spend return to pre-pandemic levels yet, it has steadily increased in Q3 2020 due to a shift to local and outdoor travel promotions, which is a positive sign for the future.
Kelly McMahon is SVP of Global Operations at SpotX, directing all enterprise-level pre-and post-sale revenue management activities, and leading all operational initiatives for brands, agencies, media owners, and programmatic traders to drive incremental ROI. In doing so, Kelly manages a team of nearly 60 talented account management, planning, ad operations, and customer success professionals. Prior to SpotX, Kelly managed online planning and publisher relations for National CineMedia and led ad operations at Altitude Digital Partners, before breaking out on her own as a career consultant.
With more than 15 years of experience in ad tech including nearly six years at SpotX, Kelly is recognized as an industry thought leader and has spoken on stage at the Lotame Spark Conference, AdMonsters Publisher Forum, Advertising Week New York, General Assembly Denver: Women in Tech, and several SpotX-hosted events. She holds a bachelor’s degree from the University of Colorado at Boulder: Leeds School of Business in business administration and marketing.