Addressable TV Advertising Forecast To Grow 50%, Hit $87B By 2027, But Challenges Remain
- by Karlene Lukovitz @KLmarketdaily, June 26, 2023
Addressable TV advertising reached $56 billion globally in 2022 and is forecast to grow more than 50%, to $87 billion, by 2027, according to a new report from Ampere Analysis.
Artificial intelligence (AI) and other technology is expected to help drive that growth, but lingering misconceptions do present challenges, says …
So "addressable" TV accounts for "up-to" 20% of TV ad spending in the U.S. and other "mature" markets. Hmm. What does "up to" mean? Maybe .5%? or 2.7% or 11.6% or even 19.9%%---they are all "up to" a fifth. But let's take it the way it was probably intended---about 20% of "TV" ad spend in the U.S. is "addressable".
Next question is what do they mean by "TV"? Certainly it includes "linear TV" as well as CTV---that gets us up to about $90 billion. But what about digital video? Ok----let's add another $50 billion. Now we are up to $140 billion---and we're being a tad conservative. So 20% of $140 billion works out to $28 billion.
That's an impressive figure. Now let's break it down. How much of "linear TV" is addressable. Best estimates have that number at about $3 billion. What about CTV? So let's add a billion. Which leaves us with $24 billion for digital video. In short about half of digital video ad spend is "addressable", though exactly what they mean by "addressable" isn't clear. Do they mean that these buys are sending each device commercials based on the owner's assumed---or proven---marketing value to each advertiser?And what about programmatic buying, which we are told represents a very high share of digital ad spend? Is programmatic ---which usually seeks ot the lowest CPMs---able to do the same job as "addressable"---which generally commands a significant CPM premium?
Questions, questions.