'Shorts' are long on value for consumers and advertisers has been saved
'Shorts' are long on value for consumers and advertisers
Growing consumption unlocks new opportunities
A phenomenon that started with “cute cat clips” now dominates the broader internet and mobile video space.
Fueled by the rise of mobile as a content-consumption medium, short-form videos have become an entertainment staple for many consumers. For content creators and advertisers, the good news is that consumers who frequently watch short-form videos also represent a lucrative market segment.
According to Deloitte’s Digital media trends survey, 13th edition, the proportion of US consumers watching short-form video (15 minutes or less) grew to 74 percent in 2018. The numbers are even higher for Gen Z (84 percent) and millennials (81 percent). In addition, nearly 40 percent of Americans spend more than one hour per week watching short-form video clips on social media platforms.1
The survey also reveals that consumers watching more than an hour of short-form video clips per week have above-average subscription rates: 81 percent subscribe to a video streaming service (vs. 69 percent of other consumers) while 59 percent pay for a music streaming service (vs. 41 percent of others). In addition, 50 percent subscribe to a gaming service (vs. 31 percent of others) while 41 percent pay for a live TV streaming service (vs. 29 percent of others).2
Deloitte’s research shows that people who frequently watch short clips are more receptive to advertising. However, like everyone else, this group is frustrated with repetitive and irrelevant ads, with about 70 percent saying that the majority of mobile ads are not useful to them.3
Instead, what they want is customized advertising. More than 70 percent say that they would be more satisfied with their online experience if they received targeted, relevant ads (see chart). About half are even ready to share personal information in exchange for ads that align with their needs and interests. As a result, they desire ad-supported services that offer a reduced subscription cost, along with advertising experiences tailored to their devices.4
Short-form videos can present a world of new business opportunities—provided they are executed effectively. On the one hand, they offer an advertising platform that comprises engaged, media-savvy consumers. On the other hand, the platform can help attract consumers to broader services or subscriptions. These benefits have triggered a flurry of investments and other activities in this space.5
Companies, however, should be careful that they don’t rub consumers the wrong way. Consumers, for example, tend to abandon services if not given the option to skip ads. Meanwhile, publishers should ensure that their ad platforms stay relevant and safe.
This charticle authored by Shashank Srivastava on April 24, 2019.
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