Home entertainment and mobile gaming soared post-pandemic, and marketers and advertisers are intent on reaching audiences spending increasing amounts of time with video games and OTT services.
In this regularly updated stats roundup, we will include figures on gaming, in-game advertising, TV and OTT consumption and advertising, and much more.
US consumer spend on video games increased 27% in 2020
In a series of tweets, Executive Director at the NPD Group, Mat Piscatella, shared some fascinating insight into US consumer spending on the video games industry throughout 2020, based on full-year data collected by the company.
Total spend on video game content across PC, console, mobile, portable, cloud and VR platforms in the region reached $56.9 billion, growing by 27% year-on-year.
In December alone, $7.7 billion was spent on such games, up 25% compared to the same month in 2019, while spend on hardware grew to $1.35 billion (+38%), no doubt boosted by the release of the new Xbox and Playstation consoles in November.
The Nintendo Switch was the best-selling console in 2020, as evidenced by the huge rise in demand seen throughout the spring and summer months when many looked to distract themselves from life in lockdown. According to analysis, the annual dollar sales of the Switch were only outstripped by the launch of the Nintendo Wii in 2008. The PlayStation 5 came in second place for dollar sales in 2020, but its predecessor beat it in unit sales.
By now, we all know that 2020 has accelerated industry performance across many sectors, and the gaming industry is no exception. The growth in both consumer spend and engagement across video game platforms can only be a good thing for marketers looking to branch out into, or expand, their advertising efforts in game and at sponsored eSports events.
81% of US and UK-based media buyers want to increase in-game advertising spend into 2022
Game On For Advertisers – an October 2021 report from in-play advertising platform Admix – has found 81% of media buyers want to increase their in-game advertising spend over the next 12 months. This is, in part, thanks to a renewed interest from advertisers in the power of gaming as part of the marketing mix. Added to that is the huge uptake in the hobby from consumers throughout the pandemic. By the end of the year, three billon active gamers, globally, could spend up to $176 billion on games.
The survey of more than 400 media buyers from the US and UK also shows there are plenty who do not have the budget to advertise in the next year, but are including it in their long-term plans – 93% say they intend to run in-game ads by 2025. However, one-fifth of respondents stated the key reason they would be hesitant to purchase in-game advertising space is a lack of understanding around the process and execution.
This wariness and confusion translates more strongly among US clients, 23% of whom have directly resisted spending on the ad format versus just 9% of those in the UK. Similarly, 52% of UK media buyers’ clients are requesting that money be spent on in-game marketing compared to 33% in the US.
As interest in video game advertising continues, it opens up even more possibilities for marketers looking to promote their brands within the vertical. The availability of programmatic options, third-party verification for in-game advertising performance and an increase in in-game inventory have all been cited as the biggest causes of growth in the category.
Video game industry ad spend rose 80% year-on-year in the first two weeks of November 2020
The video game industry spent more than $45 million in ad spend over the first two weeks of November 2020; a rise of 80% year-on-year, according to ad sales intelligence company MediaRadar.
This news follows a bumper year for the gaming industry as engagement amongst its core audience reached record highs and both Sony and Microsoft brought brand new consoles to market. In fact, it was the latter that drove much of the increase in ad spend. According to the data, Sony spent more than $15 million advertising the new PlayStation 5 in the month before its release – more than three times what Microsoft spent promoting its equivalent Xbox Series X. Nintendo also contributed to the rise, with ad spend increasing 138% in the first two weeks of November compared to the two weeks prior – all the better to compete with its rivals.
New games have also been released to coincide with these major new console launches, such as Call of Duty: Cold War and Assassins Creed: Valhalla, causing a 76% year-on-year increase in ad spend from video game titles overall. Additionally, popular gaming retailers increased promotions during these two weeks in an attempt to entice fans to spend throughout the much-anticipated launches.
From Jan-Aug 2021 global video game ad spend rose 17% year-on-year
Insight from MediaRadar has found global video game advertising rose by 17% year-on-year between January and August 2021. Ad spend across the industry totaled $421.2 million during this time, up from $360 million the year before, as publishers took advantage of increased consumer engagement with games during the pandemic.
Analysis reveals the top spending advertisers so far this year have included The Elder Scrolls, Hero Wars, Rockstar Games, Harry Potter: Puzzles & Spells and Final Fantasy XIV Online. Overall, these five brands spent a whopping $78 million, equating to 18.5% of the global total.
Meanwhile, ad spend within the wider category of video game consoles and streaming platforms has increased even further. In the eight months ending August 2021, entities like Nintendo Switch, Xbox, Twitch and Steam have invested 36% more in advertising versus the same period in 2020. Together, these four gaming giants spent $45 million on ads, up from $33 million last year.
Interestingly, these companies have also been switching up their marketing strategies in recent months, focusing more intently on where they spend their cash to garner the best return on investment. TV advertising, which previously accounted for more than half (51%) of advertising spend for gaming brands in 2020, now accounts for a much lower 42% in 2021.
36% of British mobile gamers have played more often since the start of the pandemic, and the habit is here to stay
An April 2021 YouGov survey found the recent soar in mobile gaming could be here to stay. Thirty-six percent of British mobile gamers said they have played more often since the start of the pandemic, with females most likely to contribute towards the rise (42% compared to 29% of male mobile gamers). This figure grows to 39% of mobile gamers in the US, but growth has been more evenly split between males and females (40% of females vs. 38% of males).
Further data shows the majority of both GB and US gamers hope to sustain their heightened mobile gaming habits post-pandemic, despite returning to busier lifestyles. Sixty-eight percent of British respondents agreed that they were very or somewhat likely to continue spending more time on the activity once Covid-19 has subsided, rising to 77% of US respondents.
With more than two-thirds of British consumers now regularly playing games on their mobile devices, game developers and (by extension) in-game advertisers can expect to maintain a large share of consumers’ designated entertainment time in the future.
In H1 2021, gaming accounted for half of all global mobile user-acquisition spending
VentureBeat reports H1 2021 data from Adjust that finds gaming accounted for half of all global mobile user-acquisition spending, following a huge boost in engagement across mobile games since the pandemic began. This figure is even higher in APAC, at 64%, and in North America (57%).
By comparison, the second largest category on mobile – ecommerce – represented just a 16% share of user-acquisition spending worldwide. In EMEA, this divide between investments is less pronounced, with a below-average 39% of user-acquisition spending dedicated to mobile gaming, and 27% to mobile ecommerce.
Additional data shows puzzle gaming continues to dominate as the top mobile gaming sub-vertical around the world, accumulating a 16% share of downloads. This trend is reflected in most regions with the exception of APAC, where role-playing games have the largest lead (at 23% of all downloads).
It is clear why user-acquisition in mobile gaming remains so high during 2021. Currently, gaming apps comprise one quarter of all downloads on iOS, and 21% of downloads on Android systems. While the number of sessions spent in-game so far in 2021 is unsurprisingly lower than the spike we saw at the peak of the first wave last year, engagement grows steadily – up 4% on Q4 2020. Total mobile gaming sessions in February 2021, for example, outperformed January 2021 by 47%.
Global mobile gaming revenue up 25% year-on-year in Q1 2021
Analysis by SensorTower on the state of mobile gaming has found global gaming revenue rose 25% year-on-year in Q1 2021, outpacing the 18% and 16% growth recorded, respectively, over the last two years. Most notable growth was seen during Q2 2020, at 33% up on the same period the year before, when (for the first time) games earned a total $20 billion in just one quarter.
US mobile gamers remain the biggest spenders of all, with mobile game revenue there reaching over $6 billion by the first quarter of 2021 – a 34% rise year-on-year. Japan came second, creating over $5 billion in revenue, and is closing in on the US’s lead at a higher 35% growth rate. Across both of these regions, spending on these apps grew by more than $1 billion over the course of the year.
After strong download performance for mobile games between Q1 2019 and Q1 2020, up 39%, growth has slowed substantially to just 5% between Q1 2020 and Q2 2021. However, this figure still considerably outpaces the 1-2% average annual growth from the years prior to 2019, suggesting some of the enthusiasm for mobile gaming that was first seen at the beginning of the pandemic has been retained into 2021.
As ownership of smartphone devices soars amongst India’s population, the number of downloads of mobile games has followed suit. By Q1 2021, the region saw a 28% year-on-year increase in downloads, peaking at almost 3 billion during Q3 2020 and accounting for 12% of all mobile game downloads in 2020.
76.2% of European consumers have consumed more audio content since the pandemic started
A comprehensive Audio Content Survey from Sortlist in April 2021 shows, on average, 76.2% of European consumers have consumed more audio content since the pandemic started than they did before. The research on listening habits was conducted on 500 business leaders of small to medium sized enterprises across France, Germany, Spain and the Netherlands.
Radio was the most preferred type of audio content among those surveyed, reaching its highest in Spain at 56.1%. This was followed by podcasts, which seem to be less popular in the Netherlands (30.1%) than they are in France (40.9%). In fact, there was just a 5.2% gap between the popularity of radio and podcasts in France. With 900,000 new podcasts created in 2020 alone (a 300% year-on-year rise), the popularity of podcasts could increase even further, and perhaps overtake radio, in certain regions in the near future.
Across the board, consumers are much more likely to listen to audio related to their hobbies than their day jobs. Other popular topics include news-related content, audiobooks and other miscellaneous entertainment.
The data also reveals some good news for advertisers using audio formats for their campaigns. Seventy-eight percent of survey respondents said they have bought, or are open to buying, products promoted alongside the audio content they listen to.
TV and OTT
62% of Britons watch more SVOD since the pandemic began, even after lockdown
Advanced Television reports October 2021 data from Criteo that shows the popularity of SVOD (subscription video on demand) with British consumers has not waned since lockdown was lifted. Sixty-two percent of those surveyed said they were watching more content provided by paid streaming services now than they did before the onset of the coronavirus.
When it comes to what consumers prefer about these services, more than half of them say that platforms like Netflix, YouTube and Prime Video had higher entertainment value than linear TV channels, often for a much lower price. Currently, one-third of TV viewers in the UK are spending over £50 on a cable or satellite subscription, while just 1 in 8 spend the same amount on the popular video streaming services they use, combined.
Increased time at home, versus pre-pandemic, was rated the top reason for subscribing to SVOD brands (56%), however, the ability to watch shows and films anytime, anywhere was also appealing (42%), as many people return to their busy daily lives.
Looking to the future, almost one-third of consumer respondents stated they would like to be watching more SVOD content this time next year. This will mostly be driven by Gen Z and Millennial cohorts who, on average, are watching videos on both free and paid streaming platforms far more than the average individual (42% vs 29% and 40% vs 29%, respectively).
Perhaps most importantly for advertisers, 40% of consumers claim that ads shown on SVOD platforms have had an impact on their purchasing behaviour over the past year.
US OTT ad spend up 55% between January and May 2021
While over-the-top (OTT) ad spend in the US remains substantially lower than linear TV (22% vs 78%), some industries are shifting their investment further to OTT as streaming trends accelerate amid Covid-19. Research from Standard Media Index (SMI) found that, overall, US media ad spend rose 22% in the five months spanning January-May 2021, while investment in OTT across the region soared by 55%.
This has allowed OTT CPMs to rise 30% higher in price than CPMs for linear TV advertising.
“That has lot to do with the fact that you’ve got brand safe content, commercial grade programming, authenticated services and authenticated impressions with OTT, and targetability with the reach of television. So, it is the best of both worlds,” Ben Tatta, President of SMI, said in a webinar explaining the findings.
The apparel and accessories category is one particular vertical driving this trend, with an average 61% of its total media budget directed towards OTT advertising, while OTT has a 36% share of budget in the travel services industry. Other categories are also turning to the format as it becomes more popular among advertisers, with some splurging more money than others (and on different types of channel).
Drilling down, a large fraction of ad spend in the US automotive category is dedicated to OTT – the bulk of it directed at sports channels like ESPN, CBS Sports and NBCSN. More than 24% of ad revenue for OTT sports channels can be attributed to auto advertising as a result. It’s a similar story for the prescription drugs sector, which now accounts for 22.7% of ad revenue for OTT sports versus just 3.1% for linear TV sports.
Nearly 1 in 5 UK consumers are pure streamers
In 2020, the number of consumers that watched traditional TV on a weekly basis was lower than it had been in at least the last 4 years, at 79%, according to a December 2020 study conducted by AudienceProject.
Similar patterns can be seen in behaviour across regions like Germany, Denmark, Sweden and Norway. The trend is even more pronounced in the US, where just 59% watched traditional TV in 2020 compared to 83% in 2017.
This consistent drop in traditional TV viewing is being replaced, unsurprisingly, by popular subscription streaming services like Netflix, Disney+ and Amazon Prime. In the UK alone, those that use streaming platforms at least one a week has risen from 49% in 2018 to a much larger 77% in 2020, with under 45s dominating the shift.
As a result, nearly one in five (17%) UK consumers are now ‘pure streamers’ – that is, individuals who have ditched traditional TV altogether in favour of streaming services. The figure will no doubt increase over time, especially on account of new habits formed during the pandemic. Indeed, last year, 27% of UK respondents to the study said they had either watched less traditional TV or had begun using streaming services more than they did in 2019.
The UK still has some way to go before it catches up with the viewing habits of consumers in the US, who lead the way globally, with one-third (32%) now classified as pure streamers.
Netflix saw new subscribers rebound by 100% year-on-year in Q3 2021, thanks to backlogged ‘big’ content
Following a notable dip in subscriber growth in the summer of 2021, as life returned to some form of normality, Netflix revealed it had added 4.4 million new subscribers to its service in the three months to September 2021, up from 2.2 million recruited in the same period of 2020 (+100% YoY).
The streaming platform said the boost in subscriber numbers this third quarter was down to a ‘stronger slate’, after several of its shows were forced to postpone filming throughout 2020. Korean title Squid Game, released on 17th September, is one such example of this ‘stronger slate’, gaining popularity during the month and into the fourth quarter. It became the service’s most watched show in its history.
Revenue also performed better than expectations, rising 16% year-on-year, and reaching $7.5 billion in total.
Adding to the figures, Netflix said it predicts a further 8.5 million subscribers will sign up for its services during the fourth quarter – historically the peak period for TV and film streaming – which marks a flat level of growth versus the last three months of 2020. Meanwhile, its operating margins are expected to fall, again as a result of its ‘backloaded big content release schedule’.
Netflix obtained just 2.2 million new subscribers in Q3 2020, a more than 67% decrease on the same quarter in 2019
After very strong performance in Q1 and Q2 2020, which resulted in a total of more than 17 million new subscribers, Netflix obtained just 2.2 million new subscribers in Q3 2020. The quarter beginning July and ending September is typically one of strong growth for the streaming platform, but in 2020 it was 67% behind subscriber numbers acquired during the same period of 2019.
Just 177,000 of new subscribers added in this period came from the United States – one of its largest markets around the globe.
There was a myriad of reasons for this dramatic deceleration in growth in 2020, including consumers wanting to spend more time outdoors over the summer season after a prolonged period of indoor confinement. In a statement, Netflix cited the theory that those who wanted to subscribe during the pandemic had already done so at its peak in the first half of the year – the ‘pull-forward’ effect it predicted in its Q2 2020 financial statement.
Disney lost $4.7bn in revenue during Q2 2020, but Disney+ subscribers soared
Disney reported a $4.7bn drop in revenue for the quarter ending June 2020, but Ofcom data showed rapid uptake in its streaming service Disney+ thanks to Covid-19.
Between its launch in the UK (24th March 2020) and early July 2020, 16% of online adults in the UK had subscribed to Disney+, surpassing NowTV and ranking it the third most popular SVoD in the country after Netflix and Amazon Prime Video. However, 95% of those who subscribe to Disney+ also have a subscription with at least one of these other two services, suggesting that Disney+ offers supplementary entertainment and will likely not replace them as an outright alternative.
In June 2020, Disney+ was accessed by 32% of UK households containing children between the ages of 3 and 11, an increase from 21% in April, overtaking the reach of BBC iPlayer among this demographic, which fell from 26% to 22% during the same period. This showed Disney+ was gaining momentum with families despite the easing of lockdown at the time.
Ofcom data also found that consumers were on average spending 1 hour and 11 minutes per day on SVoD services in April 2020, which was 37 minutes higher than figures recorded in April 2019.
US daytime TV consumption by professionals working from home rose 21% year-on-year in October 2020
Insight from Nielsen indicated that US daytime TV consumption climbed after some workers became accustomed to working mostly from home. In October 2020 alone, there was a 21% increase in time professionals spent watching TV (either live, time-shifted, via an internet-connected device, or on a game console) between 9am and 4pm – the equivalent of 26 more minutes per day than in the same month in 2019.
Data from an August 2020 Nielsen study on remote workers also found that 65% of remote workers in the region watched TV or streamed video content while taking work breaks, and a further 56% admitted to watching TV with sound when they were also working.
By contrast, those not in the US workforce were actually found to have watched less TV in October 2020 than they did in October 2019, with declines ranging from 8% to 2% depending on the time of day. Meanwhile, children aged between 6 and 11 years old spent, on average, three hours and 25 minutes more watching TV during designated school hours. For children aged 12-17, there was an increase of two hours.
What marketers can learn from the evolving gaming industry and ‘Generation Next’
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