YouTube is the single biggest source of supply in US connected TV (CTV) advertising. The digital video platform’s outsize role in the US CTV space is particularly striking given that advertisers can’t access CTV inventory on YouTube on non-Google platforms (e.g., Roku).
We expect YouTube’s gross US CTV ad revenues to reach $2.89 billion this year, accounting for more than one-third (35.7%) of total US CTV ad spending. By 2022, YouTube’s US CTV ad revenues will reach $5.45 billion, and its share of US CTV ad spending will increase slightly to 38.7%.
A substantial portion of US consumer time spent with streaming video on CTV screens already goes to YouTube. Of the 25% of TV time spent with streaming video, 20% goes to YouTube, making it the second-most-watched digital video platform after Netflix (34% share), per Q2 2020 data from Nielsen. This data comes from Nielsen’s Streaming Meter, a subset of streaming-capable homes from its National TV panel, and only refers to the amount of time people spend “in front of the TV screen.” So, this metric doesn’t include streaming from other devices.
And while the majority of YouTube viewing still happens on mobile devices, it has steadily shifted to CTV screens and away from mobile over the past year. In Q3 2020, OTT/CTV accounted for 34.4% of time spent with YouTube, up from 27.0% in Q4 2019, according to data from digital talent network Collab, which launched media sales last year. Meanwhile, the share of time spent on mobile devices has steadily fallen quarter over quarter, from 49.0% in Q4 2019 to 40.9% in Q3 2020. We expect that some of this shift to viewing YouTube content on CTV screens has been accelerated due to the pandemic, as people have spent more time at home consuming streaming video content.
However, YouTube watch time on CTV screens was rising and taking share from mobile even before the pandemic. As of March 2020, watch time of YouTube content on TV screens in the US was up 80% year over year, according to YouTube internal data.
Likewise, YouTube watch time on CTV screens grew to 22.8% share in 2019 from 16.5%—and 2019 was the first year that CTV was the second-most-watched device for YouTube content in the US, per Collab.
We expect the viewer shift to consuming YouTube on CTV will be durable. “Social distancing has led to real changes in consumer behavior and accelerated the adoption of the CTV platform,” said Dave Rosner, executive vice president and head of Collab. “That’s not going to snap back once social distancing slows down; a new consumer behavior has emerged. People are more comfortable watching YouTube on big screens, and the pandemic has just accelerated that evolution."
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