Boom forecast for addressable ads

According to Rethink TV, addressable TV advertising will increase from $15.6 billion in total worldwide revenue in 2019 to almost six times that value at $85.5 billion by 2025 ...

Targeted Ad Insertion

According to Rethink TV, addressable TV advertising will increase from $15.6 billion in total worldwide revenue in 2019 to almost six times that value at $85.5 billion by 2025. This reflects advertising dollars switching to addressable as the platforms mature and become better understood by the advertising community.

The boom in addressable TV advertising is expected to occur in all sectors of pay TV and all major geographies over the next six years, engaging viewers, driving response for brands and boosting revenues for video service providers.

Aggregation of inventory is expected to be a key driver by increasing the size of addressable targets, making them viable for larger brands and overcoming fragmentation within the ecosystem. The main boost for broadcasters and pay TV operators is that addressable ads fetch higher CPMs (cost per 1,000 impressions) than general spots broadcast to all viewers of a program.

There are three types of addressable TV: linear TV, VOD/catchup and connected TV delivered by traditional pay TV operators over the Internet.

The rise of connected TV is also a major driver and has propelled much of the early growth in addressable TV advertising, especially in North America and the larger economies of the Asia-Pacific region. This reflects lower barrier to entry since ads can be targeted more easily to TVs that are directly connected to the Internet, avoiding the need for a dedicated platform. Connected TV advertising is expected to continue to account for most of the growth in addressable TV advertising, but coming from a lower base, linear and VOD TV advertising within the traditional broadcast service are expected to register larger percentage gains over the forecast period until 2025.

The boom in addressable TV advertising coincides with a decline in traditional pay TV viewing in some of the leading markets, including the United States. This is reflected in addressable accounting for an increasing proportion of total TV advertising revenue over the next six years. In terms of impressions, addressable accounted for 2.4% of total TV advertising in 2019, and expected to rise by about 3.5-fold to 8.5% by 2025. But because addressable ads cost more, their revenue contribution is greater, reaching 32.8% by 2025.        

More in Video