IAB Compass & CTV: The full report

Current level of CTV advertising spend

Spend on CTV advertising was c.£1.62bn in 2023, having grown an average of 29% annually since 2018. 

Of the £1.62bn spent by advertisers on CTV in 2023, around 51% was on BVOD and 46% on other ad-supported streaming services. The latter gained share as new AVOD services emerged and YouTube, in particular, saw a significant increase in viewing. Social media and user interface (UI) advertising within CTV platforms accounted for a small amount of additional spend.  

CTV advertising spend, £m, 2018-2024F 

 

This growth in ad spend reflects the underlying growth of CTV viewing, which accelerated during the pandemic.  

 

[CTV advertising] spend has mostly been concentrated on BVOD and YouTube… UI advertising is limited, for the moment at least.

- Content service provider

 

CTV advertising spend forecast 

We forecast CTV advertising to reach £2.94bn by 2028 – although there are factors that could drive this up or down. 

Considering the likely market developments outlined above, we have developed a Base Case for how CTV advertising is likely to develop to 2028. We also highlight key drivers, that could see higher spend and detractors which may result in lower spend. 

Base case and key drivers & detractors for CTV advertising growth 

Base case

Viewing continues to shift to streaming on CTV devices and ad spend follows. 

• Spend would reach £2.94bn by 2028 
• Increased viewing is driven by high CTV device uptake and new/improved services 
• Ad-supported viewing in particular is driven by Netflix, Disney+ and Amazon Prime Video 
• BVOD continues to account for more of TV spend with c.9% CAGR through to 2028 
• Netflix, Disney+ and Amazon Prime Video start to take a share of TV and, in some cases, digital budgets. Other AVOD, particularly YouTube, also grows. AVOD overall grows c.15% CAGR to 2028 

Drivers

CTV ad spend could be higher than this base case if the viewing shift to CTV accelerates, and ad spend follows. 

• The shift to ad-supported viewing is accelerated by new/ improved services 
• Netflix, Disney+ and Amazon Prime Video in particular take a greater share of viewing and TV budgets versus the base case. They also act as a catalyst for AVOD on CTV more generally, driving interest and innovation to overcome current issues/barriers 

Detractors

CTV spend could be lower than the base case if economic uncertainty limits overall ad spend and reduces the adoption of CTV advertising. 

• Viewing continues to shift to CTV with lower cost, ad-supported services appealing 
• However, economic uncertainty / possible recession significantly limits ad spend overall 
• In turn, advertisers are more likely to stick to tried and tested TV and digital video channels 

 

Under the Base Case, CTV advertising would reach £2.94bn by 2028, with growth particularly in AVOD. 

CTV advertising forecast, Base Case, £m, 2023-28F 

 

Future developments in CTV 

CTV viewing is set to take an increasingly significant share of viewing on TV devices. 

The shift in TV viewing towards streaming is expected to continue, driven by expanded and improved content services. 

Netflix, Disney+ and Amazon Prime Video 

The most significant development in CTV is the introduction of ad-supported tiers from Netflix and Disney, introduced over 2022 and 2023, and Amazon Prime Video in 2024. They are likely to be popular services, particularly in the current economic climate, attracting new users and seeing some current subscribers switch to ad tiers. Even a moderate shift of SVOD viewing - which is approximately 18% of video viewing for all UK adults - to ad-supported tiers would be significant for advertisers. 

Expanded & improved services 

AVOD services are likely to improve. In the US, Roku, Pluto TV and Amazon’s Freevee have increased content investment, adding more high-profile titles and originals to their line-ups. Assuming a similar approach plays out in the UK, consumers will have an increasingly appealing range of free, ad-supported content rivalling broadcasters.  

Platforms will also continue to invest in the user experience. This could be new devices and services like Sky Stream, or more general developments in platforms’ user interfaces, helping viewers surface relevant content and encouraging more viewing. 

 

I’m expecting to see more content and more partners emerge as CTV opens up distribution opportunities… UEFA and FIFA CTV offerings are just another recent example of this.

- Media agency, EVP for International Media 

 

Impact of economic uncertainty 

The economic environment may also drive interest in ad-supported services if people look to cut spending on subscriptions. Pay-TV has been counter-cyclical at times historically, but industry participants expect a shift to free services in this environment. 

 

I expect a growth in AVOD and for SVOD to go down as people try to save money.

- Media agency, Client Leadership Director

 

CTV ad spend will continue to grow, with Netflix, Disney+ and Amazon Prime Video acting as a catalyst for CTV to be taken more seriously. 

The use of CTV is already relatively widespread among larger advertisers and industry participants expect spending to increase. More mid-sized businesses are also likely to take it up as a way to get into TV at a lower cost. 

Netflix, Disney+ and Amazon Prime Video ad-supported services are expected to be a big draw for advertisers, offering scale and a premium environment. Industry participants believe they may act as a cast list for CTV more generally, attracting attention and ensuring agencies and advertisers take the category - beyond BVOD and YouTube - more seriously. 

 

Netflix and Disney arriving will bring critical mass [to CTV]… they could be a catalyst for CTV more generally, attracting more interest and leading to better solutions.

- Content service provider

 

Growth partly depends on addressing issues of fragmentation and the need for better, more standardised solutions. 

Substantial progress in this area is likely to rely on cross-industry work, less formal partnerships and/or consolidation: 

• Cross-industry solutions could address standards and cross-media measurement. Some progress has been made, but the challenge is reaching agreement across a diverse set of providers 
• Partnerships between CTV content providers and platforms may be more pragmatic, for instance jointly selling inventory to reduce the number of suppliers, or sharing data to provide better visibility of viewing behaviour and support more accurate targeting 

There are opportunities for content providers and TV platforms to collaborate to offer better targeting and solutions for frequency capping… [for example] ITV, which has created a huge first-party data set, alongside its content and sales relationships, working with platforms [like Roku] who have visibility on overall viewing on a given device.

- Content service provider

 

Consolidation could address fragmentation over the longer term. This would see convergence to a smaller number of platforms, e.g. smart-TV manufacturers like Samsung and LG who already have high market share, or tech companies like Google, Apple, Amazon and Roku.

How CTV advertising has developed

CTV has emerged as an alternative to linear TV advertising, particularly for brands looking to reach younger audiences. 

TV viewing is continuing a long-term shift from linear TV to streamed content, with subscription, ad-supported and broadcasters’ own streaming services all gaining significant share. Much of this - 80% of both SVOD and BVOD - is viewed on a connected TV. This is particularly pronounced for younger audiences e.g., with 16-34's viewing of SVOD (28%) higher than linear TV (25%). 

Share of total video viewing across all devices

 

For those wanting to advertise in a TV environment, linear TV is still the primary choice taking the majority share of viewing, but CTV is becoming more important. It represents 25% of viewing on TV devices for 16-34s, with this age group watching over 4.5 hours (281.5 minutes) of video on average per week, with 156.4 minutes (56%) on TV devices. 

Broken down by device and content type (2022)

 

Around 3/4 of UK households have smart TVs, with viewing driven by device uptake and new and improved content services. 

The uptake of smart TV devices jumped from 1/3 of households in 2017 to 3/4 by 2023. Most TV sets now sold are smart TVs and a boost in sales during lockdown helped accelerate adoption.

These households were able to tune into new services including Pluto TV (2018), Apple TV+ (2019), Disney+ (2020), Discovery+ (2020) and Paramount Plus (2022). Existing services also expanded with greater content investment, particularly in SVOD. 

Households with smart TVs

 

 

Despite this, the UK is considered to be behind the US and some European markets in terms of CTV adoption, but it is catching up. 

 

The UK is behind the US and the likes of Germany and the Netherlands in Europe on CTV adoption, which is driven by the strength of the [UK] broadcasters... but there’s a wider range of services emerging and CTV is becoming significant.

- Media agency, EVP for International Media

 

Developments in CTV ad solutions allow advertisers to better measure incremental reach vs linear TV, target spend and buy programmatically. 

Measuring the reach and frequency of TV and video campaigns is more complex as new services emerge. Advertisers need to use a mix of industry and individual provider solutions and, for instance, estimate the incremental reach of CTV and other VOD activity over linear TV. Solutions continue to evolve and update, e.g. Netflix recently signed up to BARB’s TV measurement solutions, but there are still some limitations. 

Beyond measurement, advertisers can also draw on improved targeting capabilities, programmatic trading and data on ad exposure and viewership, which have emerged in recent years. Example developments include: 

• ITV Planet V: real-time trading and measurement of incremental over TV (2020) 
• Channel 4 Private Marketplace: real-time, targeted programmatic trading of VOD content across CTV devices (2021) 
• Sky Media’s One Campaign: combined live and VOD planning, buying and measurement (2021) 
• ComScore Video Metrix Multi-Platform and Predicative Audiences: CTV targeting and measurement, including ad exposure and viewership data (2021 & 2022) 
• BARB: Amazon Prime Video has followed Netflix and Disney+ to become the latest streaming member of UK TV measurement body Barb Audiences (March 2024)

Advertiser uptake of CTV & the challenges faced

Benefits of CTV

CTV attracts existing TV advertisers, as well as opens up the TV environment to a broader range of advertisers. 

Overall adoption of CTV by large advertisers is relatively high, while still below TV and digital video. TV advertisers tend to use CTV via BVOD, whether consciously or not, but usage beyond BVOD is relatively high too. Agencies report that while some clients have been initially sceptical of CTV, they have been persuaded when they learn more and see the results.

 

Most of our big clients are regular spenders on CTV, it's not just early adopters... it can be up to 5-10% of TV budgets [excl. BVOD].

- Media agency, Client Leadership Director

 

Initially there can be questions about the quality of programming and ads [on CTV] but people try it, often using it personally, or see the results and then they're happy with it

- Media agency, EVP for International Media

 

CTV offers incremental reach for TV advertisers and a big-screen experience for digital advertisers. 

TV advertisers use CTV to provide incremental reach beyond linear TV and to target niche audiences that would be harder to find or cost more on linear TV. Digital advertisers use CTV to complement other digital video activity and benefit from the big-screen experience. 

Whether on AV/TV plans or digital plans, CTV tends to be used for brand-building goals. The use of CTV for performance goals is currently limited. Agencies are exploring the potential here, although measurement and attribution will likely need to improve. 

 

 

AVOD services offer more flexibility and the ability to target more specific audiences that would be hard to get to or very expensive to target on linear TV or even BVOD.

- Media agency, Executive Director for Digital 

 

Linear TV is still key for us but audiences are declining. We’ve used digital video, as one way to adapt and CTV is starting to emerge as another alternative.

- Media agency, Client Leadership Director 

 

Challenges of CTV 

Advertisers face challenges with CTV including fragmentation of supply, a lack of standards, and data and measurement issues.  

CTV is still relatively new and evolving. While it provides advertisers with many new opportunities, there are also several challenges: 

• Fragmentation: a large range of content providers, DSPs and other intermediaries make it harder to achieve scale and creates work for planning and buying teams 
• Standards: this is compounded by a lack of standards across buying, ad verification, measurement and other related standards 
• Data sharing: with sharing between platforms and content providers limited, and a lack of industry measurement standards and solutions, it is hard for anyone to have a full picture of viewing behaviour  
• Measurement & attribution: the lack of measurement standards and data sharing makes measuring reach and frequency challenging. For brands, it can be hard to measure the ROI of CTV activity when used incrementally with big TV campaigns. Measurement limitations also partly explain the lack of performance activity using CTV

The most common barriers flagged in our cross-industry survey were the availability of inventory, ability to measure returns and audience targeting capabilities.

 

CTV is fragmented across lots of providers, it’s generally harder to buy than TV and there are measurement issues… it’s used incrementally to big TV campaigns and isn’t picked up on econometric studies.

- Media agency, Client Leadership Director 

 

Hygiene and ad verification are seen as potential issues… there’s a lack of standards. It’s like programmatic video 10 years ago. 

- Media agency, Head of Digital 

 

With [linear] TV there’s a very standard set of tools and processes, known regulatory system, known planning tools and so on. CTV isn’t like that, it’s fragmented, and there’s still a lot of education to do.

- CTV platform

The CTV opportunity & what to do next

Advertisers should explore how CTV can complement existing TV and/or digital video activity 

CTV advertising is already significant for TV and digital advertisers - and is set to grow for the foreseeable future. 

CTV offers TV advertisers incremental reach and targeting while offering digital advertisers access to a TV experience with more flexibility and lower minimum spend, at a significant scale. The introduction of Netflix and Disney+ ad-supported tiers, along with a general shift in viewership to streaming, will drive further growth in inventory and the advertising offering is likely to mature as a result. 

What should advertisers and agencies do? 

Industry respondents identify the need for greater education on CTV, as well as closer integration with TV and digital video planning and campaign execution.  

For those relatively new to CTV, connect with CTV suppliers to understand their offering and build up an understanding of the roles CTV can play in broader campaigns - for instance, complementing current TV or digital video activity. Beyond this, we recommend integrating CTV into TV and video activity and looking for opportunities to drive efficiency and effectiveness in campaign delivery. 

Recommendations for advertisers & agencies 

Connect with CTV suppliers to explore offerings 

• Connect with new partners including content providers, platforms, DSPs and other ad tech enablers 
• Understand their audiences/scale and capabilities across data, targeting, measurement and creative, establishing what will be possible on campaigns 

Build an understanding of the roles CTV can play 

• Explore how CTV can complement and/or be an alternative to TV and digital video activity e.g. incremental reach, niche audiences 
• Understand the role different types of CTV can play e.g. video-on-demand vs live-streaming, TV-like content versus short-form, premium ad-supported SVOD offers

Align CTV activity across AV (or TV) and digital teams 

• Share knowledge and insights between teams and understand how each is using CTV 
• Integrate CTV into TV and digital video planning, potentially going as far as joint planning across all video 

Exploit the new creative options CTV offers 

• Explore the possibilities of CTV advertising, such as interaction and tailoring creative to different target segments, likely drawing on digital experience 
• Factor CTV into creative plans alongside TV and digital video, looking for ways to do this efficiently 

Build execution capabilities and drive efficiency  

• Build capabilities in delivering CTV campaigns across planning, buying, creative and measurement 
• Given the fragmented nature of supply, look for opportunities to drive efficiency when buying e.g. automation 

Advertisers and media agencies get that CTV is important and they’re trying to be more joined up across linear TV, CTV and digital video planning, but in reality, they haven’t cracked this yet… for me, that is one of the key areas to get right.

- Media agency, Executive Director for Digital