Ad-supported streaming proliferation impacts CTV CPMs, decreasing by 60%

As the landscape of ad-supported streaming services expands, encompassing both premium platforms and smaller FAST networks, Insider Intelligence/eMarketer reports (via MediaPost) a significant drop in cost-per-thousand viewer prices (CPMs). 

In the current fourth quarter, CPMs have declined by 60%, reaching $21.73, compared to $35.06 in the same period last year.

Supply-and-demand dynamics are contributing to this shift, with streaming giants like Netflix and Disney+ introducing ad-supported options over the past year. As more ad-supported streaming services emerge, the availability of inventory is expected to increase, although the report notes that CTV inventory remains relatively scarce despite the normalization of pricing.

While the pricing landscape is stabilizing, the report emphasizes the ongoing scarcity of CTV inventory. Despite this, overall CTV ad growth is projected to rise by 22%, reaching $30.10 billion in the next year, up from $24.60 billion in 2023. The growth trend is anticipated to continue, with a 14% increase to $34.30 billion in 2025.

The report highlights the age demographics of CTV audiences, noting that CTV platforms continue to attract a younger audience compared to traditional TV. Millennials constitute 84% of regular CTV users, while baby boomers make up 52.1%. This is a notable contrast to linear TV, where 83% of users are baby boomers, and only 60.5% are millennials.

Predictions for the coming year indicate that 79% of younger Gen Z consumers will be regular CTV viewers in 2024. However, despite the substantial time spent with CTV, analysts note that less than 10% of all U.S. digital ad dollars are allocated to CTV, with mobile advertising dominating the digital landscape at 65.5%, followed by desktop and laptop at 25.4%.

As outlined in a recent report, the gap in ad cost per thousand (CPM) between Netflix and Hulu has experienced substantial shifts in the past year, narrowing to an estimated difference of around $21.73.

Written by Sophie Blake


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