Commentary
Who Wins When CTV Ad Spend Hits $100B In 2030?
- by Dave Morgan , Featured Contributor, July 8, 2021
As Salmon noted in his report, the most-asked question of him throughout his career has been: “When will the inevitable growth of Internet advertising disrupt TV ad budgets?” He says that moment is now, as the use of televisions to stream content from over the internet -- CTV -- bridges signature channel television and digital video.
Salmon called out several critical growth drivers for CTV advertising relative to legacy TV. One was advanced targeting, where ads can be delivered to groups of individuals or households, not just targeted according to broad demographics -- especially attractive to advertisers focused on bottom-of-the-funnel performance. Two, there's programmatic tools and automation, which make execution easy and fast.
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Then there's the availability of self-service tools and APIs, which dramatically increase the accessibility to massive pools of small and medium-sized advertisers. And finally, there's the ability for brand advertisers to find and reach the younger and more elusive audiences they can’t find on legacy TV.
So, who wins in this new $100 billion in 2030 U.S. ad world? Here are a few of my picks:
Amazon & Google. Picking these two is easy. Both have massive scale already in CTV advertising today (AmazonFire, IMDB, Twitch, YouTube), with lots of user data for targeting and massive adjacent businesses that benefit and can subsidize long-term investments into greater CTV ad capabilities. It’s not so easy to see Facebook or Twitter winning here, though maybe Snap could become a player over time.
Roku, Samsung, Apple, LG and Vizio. Each of these companies has strong positions in CTV hardware and serves tens or hundreds of millions of U.S. viewers. Roku has a big lead today on the CTV ad front. The others will need to make significant, ongoing CTV ad-related investments to keep pace.
Disney, Comcast/NBCU, Discovery/WarnerMedia & ViacomCBS. Salmon believes that almost 80% of the CTV ad spend in 2030 will be captured by pure-play streamers rather than programming networks. This is good news for Disney and Hulu and is a big opportunity for Comcast-owned Peacock as well as for HBO Max and Discovery+, expected to become siblings in a Discovery/WarnerMedia merger, and Paramount+. Not all can become big winners, but there should be enough room for several strong mid-sized players, too.
Digital DSPs, SSPs and Advanced TV ad players. Companies like The Trade Desk, Magnite and Comcast’s FreeWheel have a head start as digital video ad platforms and are already gaining traction in CTV.
It will be critical though, to watch the pure-play streamers, since they are certain to want to own and control their own ad-tech stack, as we’re already seeing with Amazon and Google.
Key for the other digital demand- and sell-side platforms and advanced TV ad players to have a meaningful place in the market will be to find a differentiated part of the market where they can add unique value. My bet is that the most fertile area will be the capacity to truly automate and optimize campaigns cross-channel -- linear and CTV -- at the audience level, with tightly coordinated and transparent cross-channel planning, targeting, measurement and optimization.
Who do you think wins if CTV ad spend hits $100 billion in the U.S. in 2030?
Hopefully the marketers win too as they're entrusting those sizable dollars for measurable results!
Wow! Thirty percent growth year after year---now that's what some might call an overly optimistic scenario. But as this report doesn't give us comparable projections for other types of "TV" ad spend---"linear" and AVOD, for example---it's pretty tough to buy into such projections as one sector's gains should be accompanied by losses in share for other ad supported venues hence the TV ad picture in its totality also needs to make sense.
Wow Dave! The precision and accuracy in the forecast is AMAZING. How do they do it?!?!?
Hang on. If it's $21b in 2021 and it's 30% p.a. growth it would be $222b by 2030 (i.e. tenfold), and would hit $100b in 2027. It seeme they used the good old spin-the-chocolate-wheel to forecast.
Hmmn. Who will be the 'keymasters' of IP addresses in 5-7 years controling gateway access to CTV sets or devices? Maybe MSO's? Anyway, those players might push consumer privacy ala Apple / IDFA and cut access to the granular targeting folks expect to scale in CTV along with these projected ad budgets. Net, will consumers gravitate to privacy-1st suppliers creating new types of winners?
John, we are working on projections of ad spend for CTV, AVOD, and "linear TV" as well as a totally new type of "TV" named PVOD ---that hasn't been invented yet ---for every half year through 2050 which we plan to sell only to financial analysts. But to do that we need to find a very long ruler----not easy. Wish us luck.
Ed, I totallly agree that there is a big gap in almost all analysts in this space at the moment in looking at CTV separate and apart from linear TV. It makes sense that it has happened, since viturally all buyers buy and transact them separately, even if they negotiate them in packages, and CTV has been growing largely in the digital ad buying world and TV buying still lives on its own. However, I do believe that is changing and will be dramatically change - finally - over the next 3-5 years, and then it will only make sense to look at them together. Thus, it won't be able CTV at $100 billion in 2030, but probably "All TV" at $150 or so billion.
Great point Hugh. For sure, a lot of questions loom over who controls the data and whether consumer data protection truly becomes a brand/trust differentiator for viewers, as Apple is now marketing.
Ed, I've heard of a bloke who would probably like to apply for the job the create PVOD. Has an odd name - Will X. Aggerate.
Love it John!