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Retail media and connected TV (CTV) are like peanut butter and chocolate, Danielle DeLauro, executive vice president at the Video Advertising Bureau, said at Advertising Week New York last week. 鈥淭ogether, there鈥檚 nothing better.鈥�

The way people watch TV is changing. So are the ways brands advertise on TV. Connected TV has seen 鈥渕onumental progress in just a handful of years,鈥� said our analyst Ross Benes. But that鈥檚 not the full story. Here are key TV behaviors and ad trends to watch in the new year.

For the past few years, some of the biggest names in ad tech鈥擳he Trade Desk, PubMatic, Magnite鈥攈ave held onto CTV as a shiny growth narrative. Although investors鈥� enthusiasm seems to have started subsiding, CTV does represent a massive long-term opportunity for ad tech stakeholders. In the near term, a good deal of programmatic CTV ad dollars will transact directly with platforms that are still committed to keeping their content and data behind garden walls.

CTV to continue strong US growth: Households using the format to more than double pay TV in 2024, aided by tech shifts.

All the metrics we track for connected TV (CTV) are climbing, including time spent, ad dollars, and users. All this is happening as linear viewership declines, and for the first time, non-pay TV viewers have surpassed pay TV this year, according to our forecast. Here鈥檚 what advertisers need to know to keep up with this shifting landscape.

What do you get when you cross a $35 billion ad platform with a 160 million viewer streaming service? A snapshot of Amazon鈥檚 US retail media connected TV (CTV) potential. Luxury brand Movado is leveraging that potential to push video campaigns for Amazon Prime and Freevee viewers.

On today's episode, we discuss whether watching TV with other people ruins the potential of targeted connected TV (CTV) ads, who's winning the CTV advertising race, and how CTV stacks up against traditional TV ad spending. "In Other News," we talk about Netflix's road map for video games and what to make of its 1 million user milestone for its ad tier. Tune in to the discussion with our analyst Paul Verna.

32% of US adults are watching subscription video-on-demand (SVOD) services less because they are watching more on free streaming services, per a July 2023 Aluma Insights survey. For 34% of US adults, viewing behaviors across streaming services haven鈥檛 changed as a result of free streaming services.

Connected TV (CTV) ad spend in the US will pass $25 billion this year and continue to grow by double digits through the end of our forecast period in 2027. Even with a challenging market, the format is in decent shape.

Connected TV (CTV) ad spend will exceed $30 billion in the US next year, according to our forecast. At a growth rate of 22.4% YoY, that makes CTV one of the fastest-growing ad formats we track. But where those ad dollars are coming from isn鈥檛 so simple.

US adults will spend an average of 230.3 minutes per day on mobile in 2023, according to our forecast. While they will spend less time with connected TV (CTV), at 114.9 minutes per day, the gap between CTV and mobile is shrinking.

Baby boomers make up the largest share of TV viewers, while 25- to 34-year-olds predominate CTV usage. Marketers increasingly plan their buys across these mediums to achieve their targeting goals.

In the US, 77% of TV-owning households had a smart TV as of Q1 2023, according to Hub Research. Connected TVs, which include smart TVs, streaming sticks, and other devices, will be used in 115.1 million households next year, more than double the number of traditional pay TV households, according to our forecast.

LG and Samsung raise their connected TV game: While Samsung embraces interactivity, LG sharpens targeting with LoopIQ.

US linear TV ad spend is shrinking (8.0% YoY) as connected TV (CTV) ad spend grows (21.2% YoY). This year, US CTV ad spend will total $25.09 billion while linear will total $61.31 billion.

Roku stands its ground in Q1 as revenues edge up 1%: Roku has the third-largest share of CTV spending, showing how tight the market is.

On today's episode, we discuss how much advertisers spend on traditional TV, whether connected TV (CTV) is stealing all of its dollars, and how much time Americans spend watching both. "In Other News," we talk about the one big takeaway from this year's upfronts and NewFronts and whether Peacock's new pricing strategy will work. Tune in to the discussion with our analyst Paul Verna.

CTV is not immune to cookie deprecation.

Subscription OTT video is chasing linear TV in terms of time spent in the US. We estimate adults still spend significantly more time per day watching TV, but that figure is decreasing and will fall below 3 hours this year. Meanwhile, for subscription OTT video, time spent will surpass an hour and a half per day. But ad spend on these platforms is not proportional to time spent.

Chip maker NVIDIA last week launched a pre-roll ad product for cloud gaming that makes video game advertising look a lot more like connected TV (CTV).

YouTube is the most widely used free video service among US internet users of all generations, according to Kagan. Its highest saturation is among Gen Zers (82%) and millennials (78%).

Combined US TV and connected TV (CTV) ad spend will grow every year through to the end of our forecast period in 2027, when it will reach nearly $100 billion, according to our October 2023 forecast.

We forecast US advertisers will spend a combined $86.40 billion on linear and connected TV (CTV) this year鈥攊n other words, about 1 in 4 ad dollars will go to ads on the TV glass. But as linear TV ad spending stagnates, networks are incentivized to prove the reach and efficacy of their digital properties.

Nearly a third of the US population will be free ad-supported streaming TV (FAST) viewers by 2027, accounting for a total of 114.5 million viewers, according to our September 2023 forecast. That large audience base, coupled with the rise of new players and the abundance of ad inventory, is making FASTs increasingly appealing to media planners鈥攅specially those on a budget.

YouTube is positioned to be an advertising powerhouse. It鈥檚 one of the original digital video players, courting advertisers at a time when connected TV advertising is climbing. The platform鈥檚 Google ties offer it a more trustworthy reputation in the US than TikTok. And use is already extremely high. But YouTube鈥檚 high standing also makes growth difficult. Here are five charts summarizing YouTube鈥檚 position and potential.