Significant Contribution from Roku Smart TV, Firestick, and Apple TV, Study Reveals
The latest analysis from Ampere demonstrates a growing trend amongst traditional television advertisers who are allocating increased funding into addressable connected TV inventory, such as Roku Smart TV, Firestick, and Apple TV. The connected television advertising market soared to $56 billion last year as marketers began reallocating funds from traditional television towards streaming services and similar platforms.
Research company Ampere reported that in 2022, global television ad products generated $195 billion, with connected TV platforms like Roku Smart TV, Firestick, and Apple TV taking approximately 28 percent of that revenue.
Although the majority of marketing funds still find their way to traditional TV advertising, including broadcast and cable networks, Ampere predicts this segment’s share will decrease significantly over the next five years.
By 2027, connected TV advertising, also known as “addressable,” is expected to attract $87 billion, constituting nearly 40 percent of the $222 billion advertising spend projected for that year. Conversely, traditional TV advertising is expected to drop from $139 billion in 2022 to $135 billion in five years.
The growing favorability of connected TV platforms like Roku Smart TV, Firestick, and Apple TV amongst marketers is largely due to their ability to access traditionally hard-to-reach demographics, such as younger viewers with more disposable income.
Kristian Claxton, the managing partner at Finecast, collaborating with Ampere on the report, highlighted the immense potential of addressable TV as a potent communication tool for targeting previously difficult-to-reach audience segments. Claxton praised the smooth integration of this technology with traditional broadcasting’s storytelling possibilities and brand protection mechanisms.
This data emphasizes the shift of several streaming services, including Netflix, Disney Plus, and AMC Networks, from solely focusing on premium experiences to investing in ad-supported tiers. This strategy entails launching plans where lower subscription fees are offset by brief commercial breaks.
Other platforms, such as Comcast’s Xumo Play, the Roku Channel, and Fox Corporation’s Tubi, have committed more funding to content acquisition and licensing, thereby enhancing the appeal of their free, ad-supported streaming services to subscribers. This approach seems to be paying off as all three services have carved out significant market share, as reported by Nielsen’s The Gauge report.
Hardware manufacturers have also been prompted to reevaluate their strategies. For example, Vizio has pivoted from solely manufacturing low-cost television sets to expanding its Platform Plus streaming platform, which offers access to premium streaming services such as Netflix and Amazon Prime, as well as free, ad-supported content curated by Vizio itself. Another hardware manufacturer, Telly, has announced plans to provide a free smart TV set, subsidized by constant ads on a secondary screen.