Connected TV (CTV) ad spend is increasing as viewers and advertisers migrate away from linear broadcast television, and should reach US$25.9 billion globally by 2023, representing an increase of 13.2% relative to 2022, according to WARC Media Global’s latest report, which also notes that CTV should continue to grow at a CAGR of 10.4% over the next five years.
Meanwhile, the “Global Ad Trends: Connected TV's next episode” report reveals that, although CTV is keeping overall investment with TV stable, it is not yet attracting new revenue to the platform, and as a result, CTV growth is three times slower than retail media at the same point as its development.
“CTV ad spend is growing, but not as fast as one might expect. Whilst eyeballs are rapidly shifting from broadcast to streaming, this is evolution, not revolution,” said Alex Brownsell, Head of Content at WARC Media. “The market is fragmented, and CTV ad investment is mainly being drawn from existing budgets. More work must be done to help CTV to realize its full potential and ensure that media owners are able to attract ad dollars from beyond the current confines of the TV market,” Brownsell added.
The report notes that CTV gains eyeballs as consumers embrace greater choice. In the United States, more than four-fifths (83%) of households are CTV-enabled. In Europe – a region with relatively heavy linear TV usage – a slight decrease in live TV viewing has started to benefit broadcaster video-on-demand (BVOD) platforms such as 6play in France, ITVX in the UK, and RTL+ in Germany, with the latter seeing a 4% increase in views compared to last year.
This especially matters when it comes to Gen Z, often hard to reach via linear television. The consumption gap between linear and online streaming amongst under-25s is growing. In 2023, Gen Z is forecast to spent 90 minutes on average on streaming, while 86 on linear TV.
Smart TV adoption is also playing a key role. Samsung TV's latest research showed that the ability to access video streaming apps is "by far the most important feature" when it comes to smart TV capabilities. Viewers are looking for more choices in their TV consumption, WARC Media assures.