The news: About 40% of US ad impressions on YouTube now occur on TV screens, up from 12% just two years ago, a source told The Information.
Key stat: That estimate tracks with our forecast of YouTube’s ad revenues. This year, we predict that US YouTube connected TV (CTV) ad revenues will reach $2.35 billion this year, accounting for 37.3% of its net ad revenues.
What it means: The more viewing that happens on TV screens, the more viable YouTube becomes as an alternative to linear TV for marketers’ TV ad budgets. YouTube doesn’t release data broken out by device, but ad numbers are a good approximation of where users are watching. These ad dollars indicate that a lot more YouTube viewing is now happening on TV screens—a trend that was accelerated by the increased amount of time spent at home during the pandemic. And, YouTube was already, according to our estimates, the largest CTV ad seller last year.
What’s the catch? Some large advertisers have reportedly been slow to shift their TV budgets to YouTube, The Information reported. Content quality is also reportedly a significant hurdle for TV advertisers. And while YouTube’s vast library of user-generated content is great for driving viewership, marketers have to worry about brand safety and suitability more than they would on traditional TV. That’s becoming an even bigger issue as more streaming services with extensive (and quality-assured) libraries like HBO Max and Paramount+ launch ad-supported tiers that could threaten YouTube’s dominance.
The bottom line: Despite this perception hurdle, YouTube’s CTV ad business is growing rapidly. Additionally, as YouTube CTV viewership rises and linear TV viewership falls, it’ll become harder for TV advertisers to justify staying away from the platform. Though we likely won’t see the mass migration from smaller screens to TVs that we did during the pandemic, it’s likely that CTV viewing will continue to gain steam.
For more on this topic, read our report “US YouTube Advertising 2020.”
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