US Connected TV Ad Spending Will Be Over 10 Billion by 2021

Connected TV advertising is a small, but rapidly growing portion of digital advertising, and it’s competing directly with traditional TV advertising, according to eMarketer. In their inaugural forecast on CTV spend in the US, they expect the channel to grow 37.6% this year to reach $6.94 billion. By 2021, it will surpass $10 billion.

“When looking at ad revenues, YouTube, Hulu and Roku are the leaders in this market,“ eMarketer forecasting analyst Eric Haggstrom said. “Users of these platforms are likely either cord-cutters or cord-shavers. That means some TV ad buyers are willing to pay a premium to reach users who are difficult to reach via traditional TV ads.“

Despite the opportunities to advertise on CTV platforms, there are factors holding back growth. “Measurement is a huge problem that is holding back linear TV advertisers from advertising on CTV,“ Haggstrom said.

“There is no single, commonly accepted measurement across platforms like there is in TV. Also, CTV targeting, attribution and programmatic capabilities are significantly behind those of other leading digital ad platforms.“

Additionally, the huge influx of new over-the-top (OTT) services entering the market in Q4 2019 through 2020 will affect the entire industry. Many are not ad-supported, like Disney+, Apple TV+ and HBO Max. NBCU’s Peacock service is the notable exception.

“It is far from guaranteed that any of the new services will be successful in terms of gaining large audiences,“ Haggstrom said. “But low-priced, ad-free services from Apple and Disney will likely make platforms that do have ads less attractive to consumers than they currently are.“

CTV usage in the US will grow 5.3% to reach 195.1 million viewers (all ages) by the end of this year, surpassing 200 million in 2020. Roku devices lead the category with 44.2% of viewers, followed by Amazon Fire TV, Google Chromecast and Apple TV.