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Forecast Shows Video Digital Video Sales Growing by 29% in 2018

The current year will be another strong one for online video advertising. According to a forecast issued by market intelligence company Magna [1] overall U.S. digital media sales will grow by 13 percent in 2018 and reach $237 billion. By far the biggest gainer in that area will be video which will grow by 29 percent. The next biggest growth areas are social at 26 percent and search at 12 percent.

forecast, AI Targeting, Click-through rateCompare that to television ad sales which will grow by only 2.5 percent. At least it’s moving the right way: Print ad sales will decline by 11 percent and radio by 2 percent.

For a little comparison, total digital ad sales grew by 17 percent in 2017 and 21 percent in 2016, with mobile, video, and social driving those numbers.

Traditional pay TV services—or multichannel video program distributors—saw 2.6 million people cut the cord in 2017. Today, there are 29 million cord-cutter or cord-never households in the U.S. These are primarily young households that have never had a cable or satellite subscription. In the U.S. 81 percent of homes had MVPD service by the middle of 2017, a decline from 90 percent 6 years before. Magna’s forecast is that only 63 percent will have pay TV subscriptions by 2022, which means 17 million fewer households than today.

Magna’s forecast also includes global numbers, where video advertising is also surging. In 2018, video advertising will grow by 29 percent globally with total sales of $29 billion. Mobile video will drive this area with 48 percent growth. That means mobile video will make up 52 percent of digital video spending in 2018, where it will overtake desktop video spending for the first time.

This should all spell good times for video marketers [2], but Magna cautions that consumers are increasing turning to ad-free paid tiers to get their news and entertainment.

“Hulu, for instance, no longer offers free, ad-supported viewing in the U.S. but instead has a ‘limited commercial’ plan ($8 a month) and a ‘no commercial’ plan with zero ads ($12 a month), which is increasingly popular. Other online streaming players that were always ad-supported have recently launched no-commercial subscription-based offers, e.g. Pandora and YouTube (‘Red’). Content providers (video, music, news) follow that route partly to avoid ad blocking,” the report says.