Connected TV Ad Spending Small But Seen Growing

Survey finds need for greater penetration and better measurement
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Ad spending on connected TVs is modest but expected to increase as viewership rises, a new survey says.

While half of the marketers currently advertising via connected TVs say they’ll raise their spending on the medium, only 43% of all marketers said they were very familiar with connected TV, according to the study, conducted by the Association of National Advertisers and BrightLine, which creates digital ads for connected TVs.

More than half of U.S. homes have a connected TV—a screen that plays TV programming and is also connected to the Internet. Viewing on streaming devices grew 380% in the first quarter, according to the report.

A large number of advertisers—78%—said they have not engaged in connected TV advertising over the past year, with 13% of those saying they intended to engage over the next year, while 59% were unsure. The main reason for not engaging was “lack of familiarity,” the study says.

The biggest perceived benefit of using connected TVs was audience targeting, which was cited by 50% of respondents. But the biggest issues preventing greater spending was a lack of reliable measurement metrics and the small level of audience penetration at this point.

Budgets for connected TV are small. Nearly half of those responding to the survey said they allocate 1% or less of their total TV advertising budget to connected TV. But half of the current connected TV advertisers plan to spend more next year. Ad dollars going to connected TV will likely come from other TV activity, 71% of the respondents said, and digital media (37%).

"Connected TV is a great opportunity for the television advertising industry, as it leverages current consumer viewing behavior and provides digital-like targeting. But measurement issues need to be addressed to optimize future growth,” Bob Liodice, CEO of the ANA said in a statement.

"The adoption and usage statistics in this report show that TV viewers are intent on bringing the dynamic, personalized experience they can achieve in digital and in mobile to the television,” Jacqueline Corbelli, co-founder and CEO of BrightLine said. “Marketers' responses to this survey are very well aligned with the growth in activity, the size of media spend, and the general excitement for connected/OTT TV advertising we are experiencing here at BrightLine."

(Photo via Ervins Strauhmanis's FlickrImage taken on Sept. 19, 2014 and used per Creative Commons 2.0 license. The photo was cropped to fit 3x4 aspect ratio.)

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