Linear TV had its heyday, but now major streaming brands like Hulu, Netflix, and Disney+ are upending the world of traditional TV advertising — and it’s probably for the better.
And this major media disruption means there are some impressive stats on CTV advertising. Here are a few numbers that you (and your boss) should know.
(As much as possible, we went right to the original research for these connected TV stats — Plus, they’re updated for 2023/2024.)
CTV viewership statistics are particularly impressive. According to data from eMarketer, 2023 was the first year that U.S. cord-cutting households (68.7 million) outnumbered pay TV households (62.8 million). Broadcast and cable fell below 50% of all TV usage for the first time ever.
This may be no surprise, as Leichtman Research Group reports that 88% of US households own at least one Internet-connected TV device (e.g. smart TV, streaming device like Roku or Amazon TV Fire Stick, gaming console, etc). Almost half (49%) of US adults watch these connected TVs daily — a significant increase from just 6% a decade ago.
But as the market matures (and fragments), some CTV services are earning more new viewers than others. According to Parks Associates, the number of U.S. ad-supported streaming households jumped to 41% late in 2023, compared to just 31% earlier in the year. The majority of subscription video-on-demand (SVOD) sign-ups on Peacock and Hulu are ad-supported, for example.
Free ad-supported television (FAST) is also growing…fast. FASTs like Pluto and Tubi have grown rapidly, with 50 million monthly active users and $1 billion in yearly revenue.
“Streaming providers are raising prices and cracking down on account sharing in search of profitability, but consumers are struggling to make ends meet. Ad-supported business models are a win-win for both parties,” explains Parks Research Analyst Sarah Lee.
Free ad-supported television (FAST) is also growing…fast. FASTs like Pluto and Tubi have grown rapidly, with 50 million monthly active users and $1 billion in yearly revenue.
“Streaming providers are raising prices and cracking down on account sharing in search of profitability, but consumers are struggling to make ends meet. Ad-supported business models are a win-win for both parties,” explains Parks Research Analyst Sarah Lee.
Globally, marketing departments are drawn to the allure of data-driven ad targeting that promises to solve age-old ROI problems — and marketing budgets are shifting to CTV as the next big thing.
eMarketer expects that CTV ad spend will increase to over $30 billion in 2024 — a 22.4% increase from the $24.6 billion spent in 2023.
Kate Scott-Dawkins, global president of business intelligence at GroupM, explains that CTV remains a “bright spot” and “where all the growth is coming from” in TV. And when it comes to streaming vs. linear revenue, Dawkins says, “we’re almost getting to a point where we’re going to tip the balance,” with more than half coming from streaming sources.
GroupM research shows CTV ad revenue is growing at an impressive clip, with 10.9% growth in 2023 — and 13.8% growth expected in 2024. Two out of three advertisers using CTV/OTT planned to increase their spending in 2023, with a majority (62%) reallocating funds from their digital, social media or linear TV budgets.
CTV advertising brings many benefits beyond the sizable viewership.
Ask just about anyone who has entered the CTV advertising arena, and you’ll find the pull to this new market comes down to good marketing sense. Media research firm CoLab Media Consulting found that more marketers are investing in CTV advertising because:
An AdImpact report estimates that political advertisers will spend a record-breaking $10.2 billion in 2024 — a 13% increase over the 2020 election cycle.
And the big winner on political ad spend will be local. BIA Advisory services says US local advertising will grow 8.6% to over $175 billion in 2024, largely due to the spike in political advertising.
“As expected, 2024 will be driven by political spending, and, even in markets that are not highly contested there will be a large amount of political advertising,” said Nicole Ovadia, VP Forecasting & Analysis, BIA Advisory Services. “Local political advertising will be fueled by the Presidential and Senate campaigns, as well as issue-based advertising."
CTV/OTT will see the biggest share of this 2024 local growth with an increase of nearly 40%.
In the absence of political spending, BIA projects local advertising spend will grow by a more modest 2.2% in 2024 (to reach $165 billion).
Wherever there is money, there is someone trying to exploit it — and that means that CTV advertising is not immune to the potential for ad fraud.
To put the risk of ad fraud in numbers, Juniper Research estimates that it will cost companies a whopping $100 billion by the end of 2024. That number is expected to jump to $172 billion by 2028.
This increase of 105% highlights the urgency for deploying innovative fraud mitigation services. Companies are smart to consider what safety features a CTV advertising platform provides. It also means that media companies are on the hook to build secure technology environments that will protect their clients from frivolous losses.
Ad fraud is a big problem, but there is a solution.
The Trustworthy Accountability Group (TAG) launched a program to directly combat ad fraud in 2016. To date, 148 companies have achieved TAG certification and according to a 2020 benchmarking survey, have experienced a 90% reduction in ad fraud.
Related content: CTV Ad Fraud—What Advertisers Need to Know in 2024
When it comes to high-impact digital marketing channels in 2024, connected TV advertising is getting the lion’s share of marketing attention.
Globally, the large majority of marketers are spending more on CTV advertising campaigns with the hopes of taking advantage of better conversion rates and ad spend efficiency. Now is the time to strategically add CTV advertising to the mix.
