CTV Landscape pt. 3

As CTV continues to disrupt the marketing landscape as a performance channel, we are back with an update on the channel. CTV ad spending has increased nearly tenfold over the past six years, causing a spike and shift in CPMs in the channel. Even more recently, in 2022, providers started to create a vast and varied landscape for streaming services and subscription models as consumers continued to spend more time streaming, which caused demand to advertise for this channel to increase and boost CPM due to limited supply. In the summer of 2022, base “broad targeting” CPMs were around the following markers:

• Disney+: $50 (in summer 2022)
• Netflix: $55 (in spring 2023)
• HBO Max: $40+ (in 2021)
• Peacock: $30 to $40 (in 2021)
• Hulu: Low-to-mid $20s (in summer 2022)

However, in 2023, upfronts were a bit softer than expected due to the economic downturn, which caused sellers to be overall more concerned with securing deals and volume of impressions. Due to this, major networks have reduced their rates by 5-10% compared to last summer. Below are the major shifts seen in CTV’s major players:

• Netflix: $39-$45 ($39-45, per The Wall Street Journal)
• Disney+: $30s to mid $40s
• Max: $30s to low $40s
• Peacock: $20s to mid $30s
• Hulu: $20s to low $30s

Although these rates are base rates, we’ll keep an eye on how rates continue to shift – especially for Netflix (the top preferred ad-tier platform in 2023). Marketers predict that Netflix will remain the preferred ad-tier platform in 2024. 71% of Netflix subscribers said they would stick with ad-free, and 24% said they would switch to ad-tier. Disney+ comes in second place with 54% of Disney+ with 54% of Disney+ subscribers saying they would stick with ad-free, and 35% said they would switch to ad-tier.

NC POV on CTV Shifts

Now, for what you’ve been waiting for….our POV. These shifts truly confirm how quickly CTV is becoming a performance channel. Forecasts show that CTV ad spend will continue to skyrocket over the next few years, especially in the retail media landscape. By the end of 2027, it’s forecasted that CTV ad spend will nearly increase by 7x from $813M to $5.63B (yes, you read that right, that’s billions). One of the main reasons behind this channel growth is that retail biggest players are partnering with CTV platforms (i.e., Kroger, Instacart, and Best Buy with Roku) to grow their connectivity and expand their funnel reach. Brands are looking to use performance channels’ full funnel to reach customers earlier in their journey, and CTV is proving to do just that. As always, we’ll keep an eye on the growth and shifts within the CTV landscape, but for now, you can expect continuous growth in the channel and increased opportunities for advertisers across all industry verticals in the next few months.

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