Connected TV ad spending to top $10B by 2021, eMarketer says

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EMarketer said upcoming launches like NBCUniversal’s ad-supported streaming service Peacock will raise the connected TV advertising market while new services, including Apple TV+, Disney+ and HBO Max, could have an opposite effect. (Pixabay)

Advertising on connected television devices and platforms will continue to account for a bigger piece of the overall marketing spend in the U.S.

That’s according to eMarketer’s first forecast for connected TV ad spending. The research firm predicts spending will grow 37.6% this year to reach $6.94 billion, and by 2021, it will surpass $10 billion. By 2023, the total will be more than $14 billion.

Over the next five years, the rate of annual growth connected TV ad spending will slow, from a projected 28% in 2020 to 13% in 2023. But over that same period of time, the category’s percentage of total media ad spending will rise from 2.9% to 4.7%.

RELATED: U.S. digital ad spending will pass traditional this year, eMarketer says

“When looking at ad revenues, YouTube, Hulu and Roku are the leaders in this market,” said eMarketer forecasting analyst Eric Haggstrom in a statement. “Users of these platforms are likely either cord-cutters or cord-shavers. That means some TV ad buyers are willing to pay a premium to reach users who are difficult to reach via traditional TV ads. These platforms are also bulking up their targeting, programmatic and attribution capabilities in order to attract buyers from the digital world.”

EMarketer said upcoming launches like NBCUniversal’s ad-supported streaming service Peacock will raise the connected TV advertising market while new services including Apple TV+, Disney+ and HBO Max could have an opposite effect.

“It is far from guaranteed that any of the new services will be successful in terms of gaining large audiences,” Haggstrom said. “But low-priced, ad-free services from Apple and Disney will likely make platforms that do have ads less attractive to consumers than they currently are.”

As connected TV usage increases, eMarketer predicted Roku will continue to lead the pack. The firm said connected TV usage in the U.S. will grow 5.3% to reach 195.1 million viewers (all ages) by the end of this year and surpass 200 million in 2020. Roku devices lead the category with 44.2% of viewers, followed by Amazon Fire TV, Google Chromecast and Apple TV – but eMarketer noted that there is overlap, as some viewers use more than one device.

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