Connected TV Shows Tremendous Resilience During Pandemic and Takes Share from Traditional TV Budgets

2020 has been one of the most challenging years for the advertising sector since the Great Recession of 2008. However, among all the paused and cancelled campaigns, digital video remains a bright spot, according to “IAB U.S. 2020 Digital Video Advertising Spend Report: Putting COVID in Context” released at IAB NewFronts.

Connected TV (CTV) is largely responsible for the sector’s resilience and was least impacted by COVID-19. According to the report, CTV will remain relatively stable even in the face of the pandemic. Average CTV spend for the year is expected to reach $16MM per advertiser. More than half of buyers are shifting dollars from Broadcast (53%) and Cable TV (52%) advertising towards CTV. Retail, media/entertainment, and telecom are the largest CTV buyers, spending, per advertiser, $32.2 million, $31.9 million, and $20.6 million respectively. Video advertising on desktop is expected to be the hardest hit in 2020.

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“Connected TV has proved to be resilient during the global pandemic, taking share from traditional TV budgets,” said David Cohen, President, IAB. “Buyers are not only following consumer attention, they are flocking to CTV because it is the perfect marriage of high-quality content, superior targeting, in-market optimization, and robust measurement. We are also seeing a strong desire from buyers to look at the video marketplace holistically, and the continued convergence of omni-channel video planning and buying solutions.”

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Additional Findings:

• Brand Safety was cited as the most important criterion for buyers when selecting digital video brands/publishers (86%), followed by premium content, (82%) and clear ROI measurement (80%)
• Programmatic in-housing continues to see significant growth, growing 64% YoY
• For social media video, story formats* are growing exponentially, expected to increase 62% YoY
• Shoppable ads and augmented reality advertising are also poised for growth up 21% and 33% respectively YoY

“Video continues to be a primary growth engine in the digital advertising industry,” concluded Cohen. “However, to remain on an upward trajectory, publishers and social media companies must continue to innovate with formats and measurement solutions while staying ahead of emerging technologies”.

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