Canadian online video audience outstrips advertising

Online video ad spending not yet on par with audience – advertisers in Canada race to catch up

Jan. 22, 2013 – Online video consumption has grown rapidly in Canada. In fact, the country ranks second in the world in online video penetration. While advertisers have lagged behind consumer uptake, ad spending on online video grew rapidly in 2012, jumping 75% from the previous year, and is projected to continue growing sharply in coming years, according to a new eMarketer report, “Canada Online Video: Consumers Lead the Way.”

Online Video Ad Spending in Canada (2010-2016)

Watching video online is nearly universal in Canada. Nearly 92% of internet users over the age of 14 watched video at home or at work as of October 2012, according to comScore, a higher percentage than anywhere in the world except Argentina.

Top 10 countries, ranked by online video viewing penetration (Oct. 2012)

Advertisers in Canada have taken note of consumers’ online video viewing behavior. “More than those in the US or the UK, Canadian marketers truly implement cross-device video strategies, including online, mobile and connected TV,” said Brian Danzis, senior vice president of North American sales for Videology, a video-ad targeting platform.

Still, popular as online video viewing is in Canada, video ad spending is still quite low. eMarketer’s most recent estimates, made in December 2012, put online video ad spending in Canada at CA$127.8 million ($127.8 million) for 2012.

While a small number, that’s a huge jump over the previous year. Strong growth is projected through 2016, when eMarketer estimates online video ad spend in Canada will reach CA$360.5 million ($360.5 million).

eMarketer projects that online video ad spending growth will significantly outpace other ad formats in Canada during the next several years. Spending nearly doubled in 2011 and is expected to maintain double-digit gains through 2016.

Online ad spending growth in Canada, by format (2011-2016)

Part of the reason that video spending will log such large growth rates is that it is starting from a low base. Online search ad spending in Canada in 2012, at CA$1.2 billion ($1.2 billion), was almost 10 times that of what was invested in online video, according to eMarketer estimates. And online display ad spending in 2012, at CA$954 million ($954 million), was more than six times that of online video.

Pre-roll will continue to be the ad unit of choice for online video advertisers in Canada, despite detractors pushing increased emphasis on interactive pre-roll. In terms of targeting, geographic will remain the dominant method.

Nearly nine in 10 video ads use geographic targeting, according to Q3 2012 data from Videology. Geotargeting is particularly important in Canada as a means of directing French language spots specifically to viewers in Quebec.

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