Connected TV set to hit $26bn globally in 2023 - Report

As viewers and marketers move beyond linear broadcast television, advertising expenditure on Connected TV (CTV) is expanding. However, while CTV is maintaining overall television spend, it is not bringing new dollars to the platform. As a result, CTV growth is three times slower than retail media growth at the same stage.

'Connected TV's Next Episode,' the latest Global Advertising Trends research from WARC Media, investigates advertising investment and consumption habits of CTV, defined as streamed video viewed on a smart TV or a TV connected to the internet.  

Co-author of the report, Alex Brownsell, Head of Content, WARC Media, says: “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. “The market is fragmented, and CTV ad investment is mainly being drawn from existing budgets. More work must be done to help CTV to realise its full potential and ensure that media owners are able to attract ad dollars from beyond the current confines of the TV market", he said.

Key findings outlined in WARC Media’s latest Global Ad Trends report, ‘Connected TV’s next episode’ are:

CTV gains eyeballs as consumers embrace greater choice. In the US, more than four-fifths (83%) of American households are CTV-enabled

As younger generations favour streaming and smart TV adoption proliferates, there are growing opportunities for media owners to diversify ad revenue streams and for brands to engage hard-to-reach audiences.

In 2023, Gen Z is forecast to spend 90 minutes on average on streaming versus 86 minutes on linear TV, according to GWI. In the US, more than four fifths (83%) of American households are CTV-enabled, according to TVision. 

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.

Patrick Morrell, Director of Partnerships EMEA, The Trade Desk, says: “Eyeballs are being picked up by different publishers and broadcasters, so it’s no longer a monopoly of the broadcast market, and advertisers finally have an opportunity to increase their broadcast cover by selecting different opportunities around connected TV offerings.”

Connected TV ad spend increases, but there’s room for growth. CTV ad investment is forecast to reach $26bn globally in 2023 

Current ad spend projections for CTV look promising. CTV ad investment is expected to reach $25.9bn globally in 2023, up 13.2% versus last year, and is forecast to continue to grow at a compound CAGR of 10.4% over the next five years, according to GroupM.