StreamTV Insider
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Advertising spend
on connected TV platforms in the U.S soared to a record $20 billion in
2023 and is anticipated to hit $22.7 billion this year, representing 12%
growth, as money follows viewers in continuing to switch from linear TV. That
would make the CTV market 35% larger than that of online video (OLV) in 2024
according to the IAB’s latest annual Digital Video Ad Spend & Strategy
Report.
Its figures also
show that advertisers value social media equally if not more than CTV as spend
on social video is expected to rise 20% for the second successive year to $23.4
billion in 2024.
All digital
categories are rising with the tide as digital video, and CTV and social video
in particular, continue to be the top channels for advertisers looking to reach
engaged audiences at scale across the purchase funnel.
Total digital video
ad spend across CTV, social, and online is projected to grow 16% this
year — nearly 80% faster than total media overall – as combined
spending is estimated to reach $62.9 billion, per the IAB report.
Digital video in
2024 is projected to have a 52% share of the total market for ad dollars over
linear TV, surpassing the latter as share has shifted nearly 20 percentage
points to digital video form linear TV in the last four years.
While dollars
flowing into CTV primarily come from reallocations – particularly linear TV and
other traditional media —31% of revenues come from overall expansion of
advertising budgets.
“Among the largest
ad spenders, CTV (69%) and social video (70%) are considered ‘must buys’
because of their ability to deliver both scale for branding at the top of the
funnel and performance outcomes at the bottom of the funnel,” said Chris
Bruderle, VP of Industry Insights & Content Strategy at IAB, in a
statement.
Per a 2024
Advertiser Perceptions’ study quoted by the IAB, a third of advertisers
identify their “general digital budgets” as a key funding source for CTV.
This year’s report
also finds that most brand categories are projecting double-digit growth year
on year with consumer packaged goods (CPG) and retail leading the way. Both CPG
and retail digital video ad spend are expected to grow at 20% and 30% respectively,
while also generating the largest total ad spend.
The report
concludes that CTV and social video continue to be valued as
audience-addressable channels that deliver both scale for branding at the top
of the funnel and performance outcomes at the bottom of the funnel.
“Advertisers go
where consumers are, and today that means digital video,” said David Cohen,
CEO, IAB. “The challenge ahead is this: in a crowded landscape, who can deliver
the best viewing experience, with the best content choices and the most
innovative advertising options? That competition is ultimately good for
consumers and good for the industry.”
The IAB partnered
with Guideline which leveraged ad billing data, other market estimates and an
IAB -commissioned Advertiser Perceptions quantitative survey of TV/digital
video ad spend decision -makers to generate the results.
A second
part of the report, to be released on July 15th, will address strategies
driving activation and measurement.
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