Advertising On Streaming Services Topped $15B In 2021

Zinger Key Points
  • Disney+ and HBO Max plan to add advertising to their offerings.
  • Netflix is now open to exploring an ad-supported platform.

Advertising on streaming services totaled $15.2 billion in 2021, according to new data from the Interactive Advertising Bureau (IAB), a 57% year-over-year gain.

What Happened: The IAB’s newly published 2021 Video Ad Spend and 2022 Outlook also predicted advertising for streaming will grow by another 39% in 2022 to $21.2 billion, adding that between 2020 and 2022 advertising spending will increase by 118%.

The report — which refers to streaming as connected television (CTV) — forecasted streaming viewership will account for 36% of the total time spent between both linear TV and streaming. However, IAB observed only 18% of the total advertising money allocated to television is going to CTV.

“Digital video is a driving force for buyers and will continue to be in 2022,” said Eric John, vice president of IAB Media Center, in a statement. “However, while CTV leads the substantial growth of digital video ad spend, the amount of dollars currently allocated to CTV is not proportionate to the amount of viewer time spent with the channel. The time is now for brands and buyers to follow consumer attention.”

See Also: Netflix Drops Meghan Markle's Planned Animated Series: Report

Why It Happened: Going forward, advertisers will have more streaming outlets for their products and services, with the Walt Disney Co.’s DIS Disney+ and Warner Bros. Discovery’s WBD HBO Max announcing plans to incorporate advertising into their offerings and Netflix Inc NFLX announcing it would begin to consider introducing advertising in the wake of its first-quarter reported drop in subscribers.

Still, challenges remain. While the report noted three-quarters of advertising video buyers (76%) considered CTV as a “must buy” in their media planning budgets, there are still issues to be resolved on the absence of transparency and interoperability among many platforms and publishers.

“Fragmentation continues to be the Achilles heel for buyers,” stated John. “From the study, we learned that video buyers most often cite sales lift as their ideal KPI for CTV, but they are not leveraging it due to measurement complexity, sub-par tool functionality, and data lags. As the industry continues to advance and CTV prevails, advertisers are looking toward a converged marketplace that addresses these issues and helps measure the implementation of a variety of creative and targeting tactics.”

Photo: StockVault

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