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Immersive formats: the next big revenue stream

News, 04 May 2017
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LONDON: Advertisers and publishers believe that immersive technologies such as AR and VR will become one of the best revenue streams over the next year, contributing to the rise of digital video across the world, a new study finds.

The State of the Industry Video Report, from media company AOL, surveyed 1,600 media buyers and sellers, and 1,300 consumers from seven markets, including the UK, to explore digital video's role in media consumption.

Over half of the UK's media buyers and sellers (55%) said that immersive formats, such as 360-video, will provide one of the best revenue streams over the next 12 months.

What's more, 62% of UK advertisers see room for VR in the digital video marketplace. Yet this is lower than the global figure at 64%.

However, the optimism is tempered by low adoption of new formats among UK consumers, among whom only a fifth watch VR video once a week or more. And while 58% of consumers globally say they never watch VR, the figure among UK consumers is closer to 70%.

"When it comes to new formats, consumer appetite is still in its infancy," said Stuart Flint, Managing Director at AOL UK. "Advertisers and publishers have an opportunity to flex their creative muscle and tailor content to serve their audiences' needs and interests."

Traditional online video formats remain lucrative, especially in pre-roll ads, as 70% of buyers and sellers planned to invest in these.

"Our research shows how important digital video has become, with almost all consumers in the UK (97%) expecting to watch either similar amounts or more online video within the next six months," Flint added.

There are challenges to global video growth, however. Over a third (34%) of consumers said they will stop watching a video that has paused to buffer just twice.

Load times spell a headache for mobile video in particular, with 43% of advertisers spending less on mobile videos due to load-time lags, Advanced Television noted.

Despite that, "the future is firmly in digital video," Flint declared , adding: "Advertisers and publishers must be prepared to invest in emerging formats to enhance the consumer experience."

Data sourced from AOL, Advanced Television; additional content by WARC staff

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