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GroupM has issued its second-annual “State of Video” report, which indicates further turmoil in the TV ad buying ecosystem, according to Adexchanger.
Apart from some of the usual findings, such as that linear TV ratings are on the decline and that Amazon is gaining ground in the advertising space, the report brings some other insights as well.
GroupM is expecting Amazon to generate $4.6 billion in ad revenue this year, by which it will overtake Microsoft and Oath and land in third spot after Google and Facebook. But the report indicates that one of its flagship services, Amazon Prime, “should not be viewed as a significant competitor in the supply of ad inventory,” since ad spots on its video services are few and far between compared to its competitors. In addition, during its Q3 earnings call, the company denied that it was planning an ad-supported Prime offering.
GroupM also found that vertical video, which was originally popularized on Snapchat, has “exploded” on Facebook.
“As ad load maxes out, we see Instagram step up to fulfill demand,” the report reads. “There is still much to do, given that the shortage of premium supply is affecting optimal planning for both precision and mass audiences.”
But the fact that Facebook is raking in great numbers thanks to something that was “inspired” by Snapchat, it doesn’t mean that the latter isn’t still in the game, and GroupM’s report shows that time users spent with videos on Snapchat is “roughly the same” as on Facebook and Instagram, but noting that company is facing issues in terms of growing its user base and generating revenue.
Report also notes that Facebook is making plays to acquire sports rights, which would position it against Amazon’s Thursday Night Football on Prime Video, opening new advertising opportunities on the platform.
Perhaps the most eye-opening part of the report, according to Adexchanger, is just how much production companies are investing in Netflix and Amazon. GroupM reports that Amazon and Netflix make up for between “one third and one half” of the world’s total production investment! And the report also notes that other companies are joining the party, like Disney, which could make the ad buying ecosystem even more complex.