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Connected TV ad spending expected to remain resilient amid pandemic


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Connected TV ad spending expected to remain resilient amid pandemic

Advertiser commitments to connected TV platforms are expected to remain relatively strong during the coronavirus pandemic, according to an Interactive Advertising Bureau Inc. study.

The data indicates advertiser spending on connected TV platforms grew from an average of $11.7 million per participating client in 2018 to $14.8 million in 2019. IAB had forecast average advertiser spending on connected TV platforms would reach $16.3 million this year, before reducing its estimate to $16.0 million.

Results of the study titled "IAB U.S. 2020 Digital Video Advertising Spend Report: Putting COVID in Context" were detailed during a June 23 session at the NewFronts, a series of media events where content providers market their upcoming digital offerings to advertising buyers. The connected TV segment, according to the IAB study, refers to ad-supported video on demand, such as Hulu, The Roku Channel and Tubi.

Jenny Schauer, senior vice president, head of advanced video at Digitas North America, said during the event that schedules on connected TV are bought in more of an upfront manner, alongside linear TV. That can make it inherently more difficult to reallocate funds when compared to other digital channels, she said. That relative inflexibility may have contributed in small part to the resilience of expected spending on connected TV this year, according to Schauer.

In the upfront, content providers look to sell linear and digital schedules to ad agencies and their clients ahead of the upcoming TV season.

The projections for the connected TV segment fared favorably versus advertisers looking to spend on mobile video platforms. Those outlays per advertiser averaged $11.3 million and $13.2 million in 2018 and 2019, respectively. IAB's estimate was for $14.0 million this year, which may now decrease to $12.1 million per advertiser given the economic impact of COVID-19.

Digital desktop video spending per advertiser totaled $9.3 million in 2018 and $11.7 million the following year and was expected to be $14.4 million for 2020. Post pandemic, IAB now calls for an average of $10.3 million per advertiser.

IAB listed the retail, media/entertainment and telecom sectors as the largest connected TV buying segments, with spending per advertiser averaging an estimated $32.2 million, $31.9 million and $20.6 million, respectively.

While connected TV budgets are migrating from broadcast and cable overall, Schauer said there surprisingly has been a swing back to linear spending during the pandemic, as some brands are looking to reach the growing audiences interested in news tied to COVID-19.

Schauer also noted many brands have moved to longer messaging, with a resurgence in 60-second units of late. The longer spots are more conducive to story-telling and are supported better on linear networks on big screen TVs.

The research for the IAB study was conducted by Advertiser Perceptions, which surveyed 350 marketer and agency executives online from Feb. 27 through March 12 and again from May 1 to May 6. The survey group comprised executives involved in digital video advertising decision-making positions with responsibility for more than $1 million in total advertising spending last year.