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In Canada, digital video surpasses TV in ad spending for the first time

Since we started tracking Canada’s ad market more than a decade ago, advertisers have steadily increased their investments in digital. Back then, less than a quarter of ad expenditures were in digital. But last year, digital reached new heights at the expense of traditional formats.

In 2020, digital video ad spending exceeded TV ad outlays for the first time in Canada. Digital video gained the most momentum of any format last year, growing by 10.0% year over year (YoY). This includes both in-stream video formats (e.g., YouTube ads) and those outstream (ads appearing in social media feeds).

In 2021, digital video ad spending will grow by another 15.2% to CA$3.25 billion ($2.43 billion). Double-digit growth will continue for a couple more years, and by the end of 2024, the format will account for more than a third (34.0%) of digital advertising and about a fifth (20.2%) of all advertising.

Digital video’s strength largely stems from the growth of social media ad units, as short, soundless, autoplay ad formats have gained significant traction in user feeds. Outstream video on social platforms is proving to be an effective alternative to TV for branding efforts.

Video ads are predominantly viewed on mobile devices, mainly due to the heavy consumption of social media on mobile. Mobile video ads will account for 84.5% of digital video ad spending this year. In 2020, mobile video ad spending rose by 8.5% YoY and will grow by 17.0% in 2021.

What’s changed: In our pre-pandemic forecast, we didn’t expect digital video to surpass TV in ad spending until 2023. But the pandemic accelerated digital video’s growth and TV’s decline.