NEW YORK: Although advertising budgets allocated to connected TV remain modest in the US, nearly half (48%) of advertisers who do use the medium plan to spend more on it next year, according to a new industry report.

Based on responses from 215 client-side marketers, including 51% at director level and above, the Association of National Advertisers (ANA) concluded that spend on connected TV is set to increase.

Its Connected TV Opportunity report was conducted with BrightLine, a company which creates digital ads for connected TV, and it found the budgetary shift to connected TV is likely to come from other TV activity (71%) and digital media (37%).

This industry trend is a response to the growing popularity of connected TV – defined as internet-connected devices that include smart TVs and over-the-top (OTT) devices, such as Amazon Fire TV and Apple TV.

More than half of all US households (56%) currently have a connected TV device, the report said, while viewing on OTT streaming devices grew 380% in the first quarter of 2015 compared to the same period last year.

Bob Liodice, president and CEO of the ANA, said connected TV offers opportunities for the advertising industry, but a number of barriers are preventing its wider acceptance.

"Connected TV is a great opportunity for the television advertising industry, as it leverages current consumer viewing behaviour and provides digital-like targeting," he said. "But measurement issues need to be addressed to optimise future growth."

Indeed, the lack of reliable measurement metrics and small-scale audience penetration are the two key issues identified in the report as the top barriers preventing advertisers from spending more on connected TV.

Another issue holding back adoption is awareness. Just 43% of respondents said they were very familiar with connected TV while only a fifth (22%) said their company had used connected TV advertising over the past year.

Data sourced from ANA, BrightLine; additional content by Warc staff