Addressable TV advertising to be worth $85bn by 2025

tv-3774381_1920The addressable TV advertising market is set to leap sixfold from $15.6bn (£12.2bn) in total worldwide revenue in 2019 to $85.5bn (£66.6bn) by 2025 as platforms mature and the data-driven medium is better understood by the ad industry.

That is the principal finding of the latest Rethink TV report, Addressable Advertising Forecast to 2025, which has been published just 24 hours after ITV unveiled its new Planet V platform.

All sectors of pay TV and all major geographies will witness growth over the next six years, engaging viewers, driving response for brands and boosting revenues for video service providers, the report states.

A key driver will be the aggregation of “inventory”, which will increase the size of addressable targets, making them viable for larger brands and overcoming fragmentation. The main boost for broadcasters and pay TV operators is that these ads fetch higher CPMs (cost per 1,000 impressions) than general spots broadcast to all viewers of TV shows.

The rise of connected TV has also been a key factor and has triggered much of the early growth in addressable TV advertising, especially in North America and the larger economies of Asia Pacific. 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 will continue to account for most of the growth in the market, but, coming from a lower base, linear and video on demand TV advertising within the traditional broadcast service will actually register larger percentage gains over the period until 2025.

The boom in addressable TV coincides with a decline in traditional pay TV viewing in some of the leading markets. In terms of impressions, addressable is set to account for just 2.4% of total TV advertising in 2019, rising by about to 8.5% by 2025. However, because addressable ads cost more their revenue contribution is greater, reaching 32.8% or virtually one third by 2025.

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