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1. Have CTV Ad Estimates Gone Over The Top? |
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Big news: Daniel Salmon @ BMO Capital Markets has planted the flag when the connected TV (CTV) ad market will hit $100B.
Connected TV ad spend (YoY growth) according to BMO Capital Markets: 9) 2028P – $80B (↑ 12%) 10) 2029P – $90B (↑ 12%) 11) 2030P – $100B (↑ 12%) |
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Flashback: CTV Leads Digital Ad Growth
Big question #1: How is the pie currently split between TV and digital video?
Quick answer: Linear TV still accounts for most (52%) of total video advertising in the U.S., but CTV is the fastest growing screen type (↑ 49%).
U.S. video market by screen type according to Cross Screen Media: 1) TV (Broadcast) – 39% 2) TV (Cable) – 13% 3) Digital (Social) – 16% 4) Digital (Mobile/Desktop) – 20% 5) Digital (CTV) – 12% |
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YoY growth rate by screen type according to Cross Screen Media: 1) Digital (CTV) – ↑ 49% 2) Digital (Social) – ↑ 31% 3) Digital (Mobile/Desktop) – ↑ 28% 4) TV (Cable) – ↓ 5% 5) TV (Broadcast) – ↓ 5% |
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Quote from Daniel Salmon – Analyst @ BMO Capital Markets: “The growth of CTV advertising is the answer to the No. 1 topic we’ve been asked over the course our career. When will the inevitable growth of internet advertising disrupt TV ad budgets? Defined as use of a television to stream video over-the-internet, CTV sits at the crossroads of advertising transformation, bridging the signature traditional channel (television) and the fastest-growing digital format (video).”
Mr. Screen’s Crystal Ball #1: The CTV ad market is poised for significant growth if it can accomplish the following two items.
Key drivers for CTV growth: 1) Targeting and measurement – Marketers are willing to pay more for better-targeted ads proven (measurement) to improve their bottom line.
2) Programmatic “like” access/workflow – More advertisers = higher prices. Increase access while lowering the entry cost. |
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Big question #2: What potential roadblocks could keep money away from CTV?
Quick answer: Slow progress on the above items, along with a lack of inventory.
Mr. Screen’s Crystal Ball #2: This is something we covered @ RampUp NYC back in 2019. Due to lower ad loads + a higher share of ad-free viewing on streaming, we see an 8% decline in ad impressions for every 10% shift in viewing time from linear to CTV. The only way to grow this market is through better ads that marketers are willing to pay significantly more. |
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Big question #3: Who is working on this problem?
Quick answer: Everyone 🙂 |
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Big question #4: What do CTV buyers want?
Top reasons for shifting budget from linear to CTV/OTT according to the IAB: 1) Targeting and efficiency – 81% 2) Incremental reach – 55% 3) Creative optimization – 27% |
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Quote from Irwin Gotlieb – Former Global Chairman @ GroupM:“The buy-side is either going to be faced with skyrocketing cost per thousands or improved targeting and addressability solves the problem for both (sides).”
Video: Irwin Gotlieb Predicts Troubling Tipping Point for TV Ad Pricing |
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2. The Podcast Wars Are About To Get Loud |
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Worth the time: Matt Flegenheimer @ The New York Times has a deep dive on the relationship between Spotify and The Joe Rogan Experience.
Audience reach: 1) Tucker Carlson on Fox News – ≈ 3M per night 2) Joe Rogan on Spotify – ≈ 5M – 10M per episode (3-5 episodes per week)
Why this matters: The podcast market will surpass $1B this year, and companies such as Spotify have made major bets in this space.
Big question #1: How important is Joe Rogan to Spotify’s podcast strategy?
Quick answer: They have dedicated an entire category to his show! |
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Annual deal size for Call Her Daddy according to Lightshed Partners: 1) Barstool Sports offer in 2020 – $500K + bonus 2) Spotify deal in 2021 – $20M
Wow: Alex Cooper increased her annual deal size 3,900% by waiting one year!
Podcast advertising (YoY growth) according to PwC: 9) 2023P – $2.2B (↑ 25%) |
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Share of podcast advertising by creative type: 1) Host-read – 56% 2) Announcer-read – 35% 3) Agency produced – 9% |
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Share of podcast advertising by objective: 1) Direct response – 51% 2) Brand awareness – 45% 3) Product placement – 4% |
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Big question #2: What is the next battleground for podcasts?
Quick answer: Paid podcast subscriptions.
Likelihood to pay for podcast access according to YouGov: 1) Not at all likely – 45% 2) Not very likely – 39% 3) Somewhat likely – 14% 4) Very likely – 2% |
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