Ad spending for connected TV increased 57% in 2021 to $15.2 billion and is expected to reach $21.2 billion in 2022, according to the Interactive Advertising Bureau’s 9th annual report on online ad spending. IAB is the industry group that hosts the NewFronts, which kicked off this week.
Based on those numbers, between 2020 and 2022 CTV ad spending will have more than doubled.
“Digital video is a driving force for buyers and will continue to be in 2022,” said Eric John, VP, IAB Media Center. “However while CTV leads the substantial growth of digital video ad spend, the amount of dollars currently allocated to CTV is not proportionate to the amount of viewer time spent with the channel. The time is now for brands and buyers to follow consumer attention.”
Three out of four video buyers (76%) labeled CTV as a ‘must buy’ in their media planning budgets. Buyers cited data usage, transparency, and no reliance on third-party cookies as some of the advantages of CTV over linear TV.
While CTV will account for 36% of total time spent with linear TV and CTV combined in 2022, according to an estimate from eMarketer, only about 18% of ad spending is allocated toward the medium. In addition to its advantages, buyers also reported several challenges that CTV still faces.
Buyers cited cross-platform campaign activation, management and measurement as some of the disadvantages that keep them from spending more on CTV.
About 88% of buyers said that they anticipate a converged linear/connected marketplace in the coming years to ease management of cross-platform and cross-channel video buys.
“Fragmentation continues to be the achilles heel for buyers,” added John. “From the study, we learned that video buyers most often cite sales lift as their ideal KPI for CTV, but they are not leveraging it due to measurement complexity, sub-par tool functionality, and data lags. As the industry continues to advance and CTV prevails, advertisers are looking toward a converged marketplace that addresses these issues and helps measure the implementation of a variety of creative and targeting tactics.”