Connected TV advertising in the U.S. - statistics & facts
In the United States, three small letters have turned video consumption and the entire digital advertising landscape on their heads. CTV, or connected TV, which refers to internet-connected devices such as smart TVs, set-top boxes, and game consoles, has become one of the most impactful broadcast innovations of the past few decades because it allows viewers to access the vast digital portfolio of over-the-top (OTT) digital video content. In 2023, a whopping 88 percent of U.S. households owed at least one internet-connected TV device, while the number of CTV users amounted to more than 110 million among Gen Z and Millennials. As viewers rapidly switch from linear TV to streaming alternatives, advertisers are quick to embrace the potential of this digital migration.
CTV ad spending shows no signs of slowing down
In 2023, CTV ad spend in the U.S. was expected to surpass 25 billion U.S. dollars, marking an increase of 21.2 percent from the previous year. While this double-digit growth was already remarkable considering the pandemic-related slowdown of the advertising industry, spending on connected TV might accelerate even further in the upcoming years. According to the latest projections, expenditure will exceed 40 billion U.S. dollars by 2027. As a result, CTV will account for more than five percent of U.S. ad spend, highlighting the ever-expanding role that this new era of television has come to play in the digital advertising world.
Marketers keep shifting budgets towards CTV
Nearly four out of 10 marketers who said they were increasing their CTV ad spend for 2023 said they were doing so by reallocating budgets from digital TV. Audience targeting capabilities constituted the main reason for shifting media budgets from linear TV to CTV and OTT. On top of that, advertising on connected TVs allows marketers to target audiences based on demographics, location, viewing history, and preferences, without being constrained by TV broadcasting schedules or ad pricing limitations. Lately, performance-related benefits of CTV advertising include achieving brand awareness and performance marketing goals - all things that are difficult to reach with traditional TV promotion. On the other hand, macroeconomic headwinds constituted the main obstacle preventing CTV ad spending in the U.S.
Who are the top dogs of the CTV world?
Among streaming giants, Disney-owned Hulu accounted for the largest share of CTV ad spending in the U.S. in 2022, followed by YouTube and Roku. While these three major companies collectively secured almost 40 percent of ad spending, CTV ad views were dominated by Roku, with its devices claiming almost half of the ad views triggered from CTV devices in the United States in the second half of 2022.
CTV consumers prefer to watch ads if it saves them a dollar
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