Ahead of the start of IAB NewFronts 2022, where media and entertainment companies present their upcoming offerings to advertisers, the industry group behind the multi-day show released its annual report on the state of the video advertising industry. Based on their findings, digital video advertising grew 21% in 2021 and is expected to grow another 26% in 2022 to reach $49.2 billion.
Leading this growth is the Connected TV advertising market, an indication of the considerable shift from traditional television viewing to streaming video. The 2021 Video Ad Spend and 2022 Outlook report says that connected TV ad spend grew 57% in 2021 to $15.2 billion and will grow another 39% in 2022 to $21.2 billion. And between 2020 and 2022, Connected TV ad spend is projected to more than double, growing 118%. The IAB says that despite these numbers, the ad industry hasn’t caught on to where viewers are paying more attention.
Specifically, it notes that Connected TV viewing will account for 36% of total time spent on both Linear TV and Connected TV combined in 2022, the amount of Connected TV ad spend is out of line with that figure. Instead, only 18% of total video ad dollars are going to Connected TV, which includes Connected TV viewing (CTV), linear, social, and short-form video.
“Digital video is a driving force for buyers and will continue to be so in 2022,” said Eric John, vice president of the IAB Media Center, in a statement. “However, while CTV is leading the substantial growth in digital video ad spend, the number of dollars currently allocated to CTV is not proportional to the amount of time viewers spend with the channel. Now is the time for brands and buyers to follow the consumer’s eye.”
Ad buyers are also facing an industry where there are many more services available to tackle, including ad-supported streamers like Hulu (with ads), Peacock, Paramount+ and others, including, in more recent months, HBO Max and Disney+. , who announced plans . Also, in a major turn of events, Netflix just said it would be introducing an ad-supported level.
Of course, the IAB also has a vested interest in making Connected TV a bigger part of the market, noting that brand advertisers can access additional data such as location or purchase data when making ad purchases. Connected TV, compared to linear. And 59% of ad buyers said it was “very clear” where their connected TV ads were running, compared to just 50% for social video and 43% for digital video.
However, the report acknowledged that challenges remain in the connected TV market, including incremental reach measurement, frequency management, and a lack of transparency and interoperability between platforms and publishers. He also pointed to the fragmentation of programmatic supply routes as another problem. But it said almost nine in 10 (88%) of ad buyers anticipate linear TV and connected TV coverage in the next few years.