The number of companies with more than $1 billion in annual US connected TV (CTV) ad sales jumped from two in 2020 to five this year. In a recent EMARKETER webinar "CTV Watch: How Streamers Compare in Time Spent and Ad Revenues,” our analyst Ross Bones explained the top trends in CTV viewership and ad spend.
1. YouTube leads in both time spent and ad revenues. The platform accounts for about a quarter of time spent and gross ad revenue, according to Nielsen data, and reaches more viewers than linear TV, said Benes.
“And this is just the YouTube main app. The YouTube TV live TV service is on pace to become the largest pay TV operator by 2026,” he said. “A lot of YouTube time is still happening on mobile phones, so CTV isn't the primary device, but the share that goes to CTV is way higher than it was a few years ago.”
2. Viewers are shifting to CTV faster than ad dollars. By 2026, CTV will account for 20.0% of time spent with media per day in the US, but it will still only garner 8.1% of ad spend. This is largely due to ad inventory.
“CTV ad loads are under 10 minutes of ads per hour, whereas linear is more like 15 minutes of ads per hour, and there are a lot of viewers still on ad-free plans, especially on Netflix,” Benes said.
3. Linear TV is losing ad share faster than time spent. Linear TV’s share of total US ad spend will drop to 11.2% in 2026, down from 28.8% in 2019, according to our forecast. Viewers haven’t turned off linear TV yet, spending a quarter of their time with media there. But, they’re doing things concurrently.
“Most TV watching now is happening with a second screen,” said Benes. “If you're watching the MLB playoffs on TVs, you [may also be] also scrolling through Facebook on your phone. So TV may account for one quarter, but it's not undivided attention.”
4. Streamers are betting on bundling to reduce churn. This can be beneficial for services that have little overlap with others, meaning big players like Disney+ and Netflix have the least incentive to offer such deals, said Benes.
“Netflix will participate less [in bundling] than other streaming services,” Benes said. “Where they will participate will be when they have an ad-tier option, but they probably will not allow the ad-free option, because they have less to gain.
Bundling can help with retention: 37% of US adults said they were less likely to cancel a bundle than an individual service, according to Hub Research. Many services are also inclined to use bundling to add people to their ad-supported tiers.
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