Debunking OTT advertising: what is the actual value of CTV ads in Europe top 5?

CTV advertising will generate an estimated 2 billion EUR in revenues in Europe top 5 markets in 2023, a 34% increase from the previous year. The growth of CTV advertising revenues is expected to be more than 2.7 times faster than the overall revenue growth of non-CTV advertising generated by OTT video platforms for 2023. CTV advertising is expected to account for 25% of all video platforms’ revenues in Europe top 5, and a record 8% of the overall revenues generated by TV and video advertising across the 5 markets for the year 2023. Ads are getting digitalized across all segments A growing number of ad products are available on fully digital platforms: on OTT services and video-on-demand platforms deployed across all screen types and on linear channels with addressable solutions deployed on set-top boxes and on HbbTV. OTT services’ TV apps are capturing a growing share of the advertising pie, mostly led by Youtube which consistently ranks in the top 5 of most used CTV apps across all European top 5 markets. As Europe top 5 greatly outweigh the rest of the continent’s ad markets, both in terms of their volume of advertising expenditures and the size of their consumer markets, it is expected that those 5 countries will retain over 80% of the CTV advertising revenues across Europe in the next few years. Taking the US CTV ad market as a benchmark, Europe has still plenty of room for growth If the growth rate of CTV ad revenues in Europe top 5 is likely to remain on a double-digit trend for the next 5 years at least, it is on a similar level to the US. But the volumes of both markets are nowhere near one another. In the US, by far the largest advertising market globally, CTV ads will represent 45% of the overall video OTT advertising revenues this year. Yearly advertising revenues per CTV-equipped household are expected to reach 220 USD (around 200 EUR) in 2024 in the US, while Europe top 5’s average is expected to just stand at 23 EUR for the same period. This huge gap is partly explained by the discrepancy between advertising expenditures per consumer in the US compared to Europe’s most advanced ad markets: advertisers spent an average of 380 EUR per inhabitant across the UK, Germany, France, Spain and Italy. This is 2.5 times less than for their American counterparts. Out of the 5 markets, the UK has a clear lead on digitalization, with the largest digital advertising expenditures, the biggest share of OTT ad revenues over TV and video, as well as a leading position in terms of revenues and innovations in the addressable TV industry. Digital segments...