Connected TV advertising market dynamics

Ofcom has published Spark Ninety’s report into the connected TV advertising market in the UK. In this report, we explore the development of the market structure, value chain, technology and market dynamics, as well as advertising expenditure. Our main findings include:

• UK expenditure on addressable ads seen on TV screens was about £515m in 2019, concentrated on BVOD and YouTube, and is likely to grow strongly

• Gateway platforms such as (Amazon, Roku, Samsung and Google) play an increasing role in the connected TV value chain as providers of operating systems, devices, user interfaces and app stores

• These global technology companies are also, to differing degrees, providers of AVOD streaming services and connected TV ad tech - in some cases, creating vertically integrated businesses operating data walled gardens or partial walled gardens

• Gateway platforms are also leveraging their positions to request or take a share of third-party connected TV streaming service ad inventory to sell. Although this practice is more widespread in the US than the UK at present, some stakeholders believe it will become increasingly prevalent in the UK, creating a tax on BVOD advertising revenues

• Global technology companies such as Google and Amazon are also have synergies between connected TV advertising and their other areas of activity - in terms of data, analytics, demand and user identity.