Digital Video and the Branded Content Opportunity
Since Craigslist first began to win market share from classified ads over 20 years ago, advertisers have struggled to keep pace with the disruption caused by digital substitution. For years, television remained immune from the effects – but no more. While television ad market share (excluding Politics & Olympics) peaked several years ago, its decline is expected to accelerate due to digital disruption.
In this Insight we explain the continuing shift of advertising dollars into digital video and the opportunity for branded content to capitalize on it. In an upcoming companion Insight we will provide an investment thesis for advertisers, production companies and private equity firms to invest in the production of branded content for consumption of digital video.
Digital Substitution Hits the Television Market Even as Video Dominates
After many years of disrupting advertising in print media, digital substitution is now impacting the traditional advertising stronghold of television. Broadcast TV advertising (except during national election and Olympics years) hit peak ad market share at approximately 40% in 2012 and has declined slowly since. Today we forecast it to continue declining steadily through 2021 to a 12% share by the end of our projection period.i
i. Magna Global Advertising Forecast – 2017
Senior Managing Director