• by Karlene Lukovitz  @KLmarketdaily, June 16, 2023

This year, U.S. linear TV ad spend is expected to decline 8%, to $61.3 billion, as connected TV (CTV) spend jumps 21.2%, to $25.1 billion, according to Insider Intelligence’s eMarketer.

That includes a projected $3.6 billion for Hulu, $2.9 billion for YouTube and $2.2 billion for Roku.

“The future is now for CTV,” Paul Verna, an analyst for the researcher, said in a “Behind the Numbers” podcast earlier this month. “It’s not three years from now. It’s not five or 10 years from now. It’s right now.”

Meanwhile, linear is projected to lose about $5 billion by 2027, to total about $56 billion, versus a peak of $72 billion in 2012. So while overall TV ad spend is projected to grow to nearly $100 billion by 2027, CTV’s share will grow from 30% to 40%.

But “there’s still a lot of value in linear TV,” Verna stressed, pointing out that, despite accelerated cord cutting, U.S. adults on average still spend more time watching linear: 2 hours and 55 minutes per day, versus 1 hour, 55 minutes for CTV.

Linear also helps reach older viewers, and delivers scale during major events like the Olympics, World Cup tournaments and U.S. elections, he noted.

He also noted that, with nearly half (45%) of YouTube’s viewership now occurring on TV screens — driven more by YouTube’s free video service, rather than YouTube TV — advertisers who aren’t already thinking about YouTube as they do about TV advertising should reconsider. (WARC recently projected that ad revenue across all YouTube platforms, including YouTube TV, will see growth of 4% this year, to $30.4 billion, and growth of 10.3%, to $33.5 billion, in 2024.)

Obviously, the new ad-supported Disney+ and Netflix tiers will help drive CTV ad growth, as will the proliferation of free, ad-supported services/FASTs by both big players and independents.

But there’s a lot more underway, including the entry of traditionally non-video players into the CTV arena.

This week, streaming audio company LiveOne launched a FAST channel for its PodcastOne platform.

Also, music platform Vevo hired Julie Triolo to create and implement a new strategic vision as vice president of research and marketing. A core mandate for Triolo is “future-proofing Vevo’s global CTV business,” according to Kevin McGurn, president of sales and distribution for the company, who observed that TV’s overall future is “data-driven, agile, dynamic and global.”

The data-driven aspect accounts for one of the hottest areas of growth: the intersection between CTV and retail media.

An increasing number of major media and brands are looking to combine the advantages of retail media and connected TV — and perhaps no partner is more attractive than the world’s largest retailer, Walmart.

NBCUniversal has now joined Roku, TikTok, Danone North America and TalkShopLive in engaging in test-and-learn partnerships with Walmart Connect, the retailer's media network. 

NBCU will be the first to test retail media-powered ads within livestreamed sports by giving advertisers access to Peacock inventory via the Walmart demand-side platform (DSP). Brands will be able to use Walmart Connect’s “unparalleled” customer transaction- and engagement-based targeting and measurement capabilities to reach streaming viewers during live sports programs, in time for Fall 2023 sports and holiday campaigns, said Sylvia Yam, senior director of strategy and business development for Walmart Connect.

Other NBCU content also will be available as part of the Walmart premium CTV bundle, which already includes NBCU streaming competitors Paramount+ and Roku.

Last September, Walmart enabled streaming viewers to buy featured products fulfilled by Walmart directly through Roku. Roku reported that during a pilot from November 2022 to February 2023, 57% of streamers paused an ad to shop for the products online, and shoppable ads drove at least three-times higher click-through rates than average video campaigns powered by the Walmart DSP.

For TikTok, Walmart provided closed-loop measurement for campaigns on the platform that drove engagement rates two times higher, on average, than TikTok’s standard benchmarks for campaigns in the U.S. Walmart customers’ average video viewing time also exceeded industry benchmarks.

Danone North America connected to more than 30% new-to-brand buyers in a CTV campaign on Connect, and TalkShopLive reported high-double-digit lifts in viewership, watch time and conversions for a Connect-powered livestream featuring products from multiple electronic suppliers as compared to its usual average benchmarks. 

“We believe a frictionless omnichannel shopping experience is where the industry is going and should go,” Jeff Metzner, vice president of Walmart team marketing and communications at Procter & Gamble, said about Connect. “The ability to purchase a product directly from a connected TV ad has potential to reduce that friction for the consumer, so we’d like to see these capabilities continue to develop.”  

Retail media and other relatively new entrants aside, the blurring of both technology and the walls between content providers will accelerate CTV’s ad growth. 

With the underlying technology behind subscription-based video-on-demand (SVOD) streamers and FASTs becoming mores similar and compatible, synergistic opportunities for companies that have both, such as Paramount Global, are opening up.

Even the lines between traditional pay-TV and streaming are starting to blur.

This week, Comcast announced that it will become the first traditional cable operator/MVPD to integrate FAST channels, by adding 19 channels from the Comcast-Charter national streaming venture Xumo into Comcast’s X1 cable box this summer.

Also, every week, including this one, features announcements of more advanced, cross-screen capabilities, like dynamic creative optimization, as well as the layering-on of more advanced CTV capabilities, like biometric tracking of attention to ads.

On the content front, major players’ much greater willingness to move beyond their former adherence to hoarding most content for their own streamers, so as to be able to maximize revenue from syndication and other deals, also becomes more apparent each week.

For instance, this week, Amazon’s Freevee FAST added 11 channels featuring Warner Bros. Discovery content, and Fubo announced a new channel produced with Ryan Reynolds that will also be available on competing FASTs Freevee, LG Channels, Plex, Sling Freestream, WatchFee, Xumo Play and VIDAA.

So even as streaming services strive to differentiate themselves from one another, and from traditional pay-TV, the CTV juggernaut is also moving inextricably in the direction of collaboration and aggregation. While the big trends seem fairly clear, the constant twists and turns make observing this revolution compelling.