UK CTV and gaming adspend to double in three years

UK advertising spend on connected TV (CTV) and gaming is predicted to double in the next three years, hitting a combined £4.15bn by 2026.

That’s according to IAB Compass, a new report from the digital industry body created with research consultancy MTM, that looks at the evolution of four fast-growing digital channels: CTV, gaming, AR/VR and shoppable advertising. 

Why it matters

The figures reflect: 

• the impact of an ongoing shift to streaming among audiences and an increase in ad-supported viewing as people look to cut down on subscriptions;
• the adoption of gaming by advertisers across a broader range of sectors, from financial services to healthcare.

CTV takeaways 

• Ad spend is forecast to rise from £1.17bn in 2021 to £2.31bn in 2026, including BVOD and YouTube. 
• Adoption of CTV by large advertisers is now close to that of linear TV and digital video.
• With a low minimum spend compared to TV, CTV is attracting a broader set of advertisers. 
• The CTV market needs to address challenges with fragmentation, standardisation and measurement – particularly beyond BVOD and YouTube – in order to fully mature. 

Gaming/other takeaways 

• Current ad spend of £815m is predicted to rise to £1.84bn by 2026.
• Native, in-game ad formats will continue to boost the gaming market, providing advertisers with the ability to combine brand and performance goals. 
• While most ad spend is currently focused on mobile gaming, if developers and advertisers embrace PC/console gaming that would significantly accelerate growth in the sector. 
• Advertisers’ investment in AR is likely to reach £250-350m by 2026. 
• Social commerce sales are predicted to reach £6.8bn [gross merchandise value] over the next three years. 

Key quote

“Between them, these four digital channels are poised to accelerate growth in digital spend over the next few years as advertisers capitalise on the potential for full-funnel marketing, marrying creative storytelling with actionable targeting” – Hannah Bewley, Senior Research & Measurement Manager at IAB UK.

Sourced from IAB UK