Brands targeting younger consumers can best boost their reach by advertising on Youtube as viewers desert traditional TV, according to a new report.
Research published today by media consultancy Ebiquity revealed the number of people viewing ads on linear TV fell 4.4 per cent last year — worse than the predicted decline of 3.6 per cent.
Overall, this commercial impact is set to drop 21 per cent by 2025 due to the growing shift away from traditional broadcasting amid the rise of new streaming rivals.
The decline will be most severe among 18 to 24-year-olds, which more than half of today’s audiences expected to disappear over the next five years.
However, the report revealed that for younger audiences advertising served on Youtube and Facebook can now broadly match the reach delivered by TV.
Youtube was deemed to be the most effective platform from brands to target younger consumers in terms of reach.
Parent company Alphabet last week revealed that its advertising business alone pulls in revenue of more than $15bn (£11.5bn) per year.
However, the report warned that the quality of engagement among online video audiences still lagged behind broadcast TV.
“Although TV remains the primary driver of return on investment, the change in media consumption habits is no secret and is a phenomenon that brands cannot safely ignore,” said Christian Polman, chief strategy officer at Ebiquity.
“What our new study does is to confirm that the rate of change in viewing behaviour is affecting brands. The ability to reach mass audiences at scale is critical for efficient and effective brand building.”
Figures released by media watchdog Ofcom last year showed that Youtube and Netflix are now the third and fourth most-watched video services in the UK, overtaking both Channel 4 and BBC Two.
Matt Hill, research and planning director at commercial TV body Thinkbox, acknowledged that brands should adapt to the ongoing shift towards both broadcaster and subscription video on-demand.
“Whilst reach may be matched for younger audiences on video platforms beyond TV, advertisers should be mindful that not all reach is created equal,” he said.
“TV is changing, but as Ebiquity recognises, it remains the fundamental driver of profit for brands.”