The number of streaming services with at least $1 billion in US connected TV (CTV) ad revenue is set to quadruple from 2020 to 2026, per our March 2024 forecast. The boom isn鈥檛 without its growing pains, though. Advertisers still need to face confusion with fragmentation, unreachable audiences who pay for ad-free streaming, and problems with campaign measurement. We delve into these three challenges and provide solutions.
CTV鈥檚 fragmentation is well-documented, but adding retail media adds complexity. 39% of US CTV/OTT advertisers cited fragmentation/too many providers as their biggest challenge, according to an April 2024 Advertiser Perceptions survey commissioned by Premion. More platforms make campaign execution harder. Consumers might see the same ad too many times on different services.
In H1 2024, US connected TV (CTV) ad impressions served by FreeWheel grew 14% YoY. In Q3 2024, US free ad-supported streaming TV (FAST) ad impressions increased 38% YoY, and global FAST impressions increased 41% YoY, according to Amagi. Total ad spending on CTV is growing. While increased inventory contributes to lower ad prices, it also elevates ad spending.
Two-thirds of US TV viewers (66%) would rather watch ads and save $4 to $5 a month than spend the money to ditch ads, according to June 2024 data from Hub Research. That鈥檚 up five percentage points from June 2023. Netflix, Amazon Prime Video, Hulu, and Max all have ad-supported tiers now, and consumers benefit by saving a few dollars along the way. Advertisers can capitalize on these cost-saving behaviors by reaching consumers with messaging that emphasizes discounts and deals.