Consumers have increasingly cut the cable cord and spent more time with OTT video, especially video streamed to CTV devices. Naturally, advertisers have followed these viewers to the media channel.
Not only has CTV advertising grown throughout the pandemic, but it also rose at rates that were among the fastest for any significant sector of the US digital ad market, thanks in part to the expanded availability of its offerings with scaled targeting through programmatic buying options, as well as the greater flexibility it offers compared with linear TV.
We estimate CTV investments in the US grew by 40.6% year over year in 2020, to more than $9 billion. Growth will accelerate this year as spending reaches $13.41 billion—a figure that will more than double by the end of our forecast period in 2025.
Among US marketers with digital video in their media budgets, 60% said that they were moving ad dollars from linear TV to CTV and OTT this year, per November 2020 research by the Interactive Advertising Bureau (IAB). While we expect linear TV ad spending in the US to increase this year, it won’t fully recover from its 12.5% drop last year, nor will it ever reach pre-pandemic levels again.