Ad spending on connected TV platforms is expected to expand 39% to $21.2 billion this year, making it the fastest-growing video channel, according to the Interactive Advertising Bureau Inc.
The double-digit growth forecast comes after connected TV ad spending jumped 57% to $15.2 billion in 2021, according to IAB's "2021 Video Ad Spend & 2022 Outlook."
The report, developed in partnership with Standard Media Index and Advertiser Perceptions Inc., conducted an online survey of over more than 400 media buyers between Feb. 15 and March 15. It found that 76% of the agency executives surveyed call CTV a "must-buy."
The increase comes as ad spending on digital video as a whole rose 49% to $39 billion in 2021 and could grow another 26% to $49.2 billion this year, according to the survey.
At the organization's 2022 NewFronts presentation on May 2, Eric John, vice president of the media center at IAB, said despite the uptick in CTV advertising, the allocations are not commensurate with the percentage of viewing the platform will generate this year. Although CTV is expected to account for 36% of total time spent with linear TV and CTV combined in 2022, only 18% of video ad dollars are being allocated to CTV.
During the NewFronts scheduled for May 2-5, digital purveyors will put their technological and measurement capabilities and content offerings on display before media buyers to secure ads from agencies and their clients.
Buyers pointed to several advantages connected TV holds over linear, including finding it 57% more effective in delivering website/sales actions and delivering a 46% bump in brand perception. Buyers can also leverage data types that are not available through linear, notably first-party, location and shopping information.
Buyers are also turning to CTV, which does not rely on third-party cookies, because it can ensure privacy relative to spending clients' ad dollars more efficiently and effectively. Moreover, 73% of video buyers expect to fund CTV spending increases, stemming from third-party cookie/mobile ID deprecation, by reallocating dollars from linear TV budgets.
One thing hurting CTV ad spending is that more than one-third of buyers surveyed said CTV faces challenges when it comes to cross-platform campaign activation, management and measurement. Just under half — 48% — indicated difficulties in measuring incremental reach across platforms/publishers, while 43% pointed to frequency problems.
Almost 90% of those surveyed believe some of these problems ultimately will be corrected by the emergence of a converged linear TV/CTV marketplace, which would ease the management of cross-platform and cross-channel video.
Almost two-thirds of linear TV/digital video buyers now have a single planning team assessing the two channels, while another 25% envision having one planning team in the future.