Connected TV (CTV) advertising revenues will continue to soar in 2022 -- up 33% over the year before to $18.9 billion, says eMarketer. Comparable numbers from Standard Media Index in conjunction with the IAB project a 40% hike to $21.1 billion.
No matter what path you pick, the growth rate is expected to decline in the next five years. At the same time, CTV is expected to rise in another area -- via the traditional TV upfront market.
Over the next five years, eMarketer says, CTV is estimated to hit $38.8 billion -- accounting for 10% of all digital media ad spend.
At that level, connected TV ad spending will be near the $40 billion or so that national TV networks pull in collectively from advertising revenue per year.
The IAB says overall digital video advertising -- CTV and other platforms -- will be $50 billion this year, nearing total linear TV spending.
Total TV advertising, including local TV, syndication advertising, broadcast and cable networks, has been around the $70 billion level for the past several years -- adjusting up or down every other year for big Olympic and big political election seasons.
In that regard, we wonder if the traditional linear TV upfront market should find a new definition -- especially if in a few years the bulk of the $20 billion or so bought in the upfront ad market, set to start soon for the September to August TV season, goes to all things streaming, CTV, and other things digital.
If we figure that $10 billion of the projected $40 billion in CTV yearly ad spend goes into traditional upfront TV buying -- perhaps largely due to legacy media-owned TV platforms. Should we treat the upfront market differently?
eMarketer estimates that next year there will be five players in the CTV space -- each generating over $1 billion in annual ad revenues: YouTube, Hulu, Roku, Tubi, and Pluto TV.
Three of these are owned by legacy media companies -- Walt Disney, Fox Corp. and Paramount Global, respectively. By that time, NBCUniversal's Peacock may not be too far behind.
You might argue that the overall CTV/digital video world does not have the supply-and-demand formula constraints that linear TV has had on its side -- in weak and strong markets -- for decades.
But that's not totally true when it comes to current premium streaming limited-advertising-supported options owned by traditional media companies.
Sure, those companies can easily expand those ad availabilities --- just as they can on linear TV platforms.
Right now premium streaming platforms for consumers -- when it comes to advertising exposure -- appears stable.
Then the other age-old upfront question comes to mind -- flexibility.
When advertising-supported, premium CTV becomes the top overall TV earner will brand marketers still need to buy a full-season's worth of premium TV advertising before a TV season starts?