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Frost & Sullivan: Australian Online Video Market Poised For Very Strong Growth With 31% CAGR To 2018

A fundamental change in the way people are now viewing TV is occurring. Consumers can now access content through companion apps on tablets and smartphones linked to TV shows such as State of Origin Football. Companion apps draw audiences deeper into the TV experience and engage consumers more with their favourite shows.

Video content producers and production houses are increasingly releasing content directly to the consumer, rather than releasing the content only via the TV broadcasting and/or pay TV networks. This growing market trend poses a level of competitive threat to the stranglehold that the major free-to-air (FTA) broadcasters have on the consumption of video content in Australia.

There are significant opportunities for new video content production that is more aligned to advertiser driven demand. Australian portals are starting to sell more sponsored video content. Opportunities exist to produce short form branded content in categories such as lifestyle, female, grocery and fashion in formats such as advertorials and sponsorships.

Overall market awareness of online video's effectiveness increased significantly over the last 12 months. There is now less distinction between traditional TV broadcasting ad buying and online video ad buying.

"Online video advertising appeals to advertisers as it allows better audience targeting and interactivity features, and delivers more in-depth advertising than traditional TV advertising. Advertising agencies and large brands now perceive its incorporation as an essential component of the advertising mix and will continue to allocate a higher proportion of their budgets to online video advertising," explains Harpur.

As online video proves effective for the marketers, more budgets from TV will be allocated to online video in the next five years, ultimately increasing advertising rates for video publishers.

A complex online video advertising ecosystem has developed over the past three to four years, encompassing a range of different class of players including ad networks, video ad exchanges, Supply Side Platforms (SSPs) and Demand Side Platforms (DSPs). Increasing amounts of video inventory are now being made available through video ad exchanges which incorporate SSPs and DSPs in real time.

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