During a year where investments in most advertising channels shrunk or stalled, connected TV ad spending is poised to keep growing.

For the first time this year, we broke out CTV ad revenues for YouTube, Roku, and Hulu.

In this Meet the Analyst Webinar, eMarketer’s senior analyst Ross Benes, and forecasting analyst Eric Haggstrom presented our latest CTV ad spending forecast for the US and discussed the challenges advertisers face with this medium.

Advertisers are making significant investments in connected TV as the TV landscape becomes more fragmented.

Programmatic advertising will account for 83.5% of all US digital display ad dollars, or $57.30 billion, this year. Growth in social, connected TV and over-the-top (OTT) advertising will drive programmatic display to almost $80 billion by 2021.

Connected TV (CTV) and other forms of OTT video were an advertising bright spot despite last year's recession. Alison Levin, vice president of global ad revenue and marketing solutions at Roku, joins eMarketer principal analyst Nicole Perrin and forecasting analyst at Insider Intelligence Eric Haggstrom to discuss what advertisers want from CTV, how they're accessing OTT video inventory, and where ad-supported video-on-demand (AVOD) fits into the 2021 media ecosystem.

The pandemic made viewers more reliant on streaming services, which stabilized CTV ad spending, allowed streamers to raise prices, and led media companies to reorganize themselves. Advertising. In our inaugural CTV ad spending forecast last year, we said that CTV ad spending would grow 28.0% to $8.88 billion in 2020.

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.

Who receives the most connected TV ad dollars?

Programmtic CTV ad spend to grow more than a third in 2020. How big the CTV ad fraud problem actually is. CTV ad fraud schemes like the one Oracle exposed will become more common—but that won’t affect marketers’ spend. eMarketer and Business Insider Intelligence have joined forces to become the leading research company focused on digital transformation.

The fastest growth throughout our forecast period is on programmatic CTV ad spending. We expect that growth to accelerate to 52.9% this year, though it will still account for a single-digit share of programmatic digital display ad spending. Desktop’s share is still nearly double CTV’s.

To be clear, we still expect CTV ad spending to significantly increase. Ad-free and ad- supported streaming are both growing, they aren’t necessarily mutual exclusive categories. But the sustained usage of ad-free streaming matters to marketers because as streaming increasingly replaces traditional TV viewing, viewers will spend less time seeing ads.

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%. More than a third (34.4%) of YouTube’s total US gross ad revenues will come from CTV advertising on YouTube.

Part of the reason why digital video ad spending will still grow during the pandemic is because CTV ad spending is surging. US CTV ad spending will increase by 25.2% in 2020, which will result in an additional $1.61 billion spent on the medium compared with last year. The share of digital video ad inventory sold in advance will remain mostly unchanged.

Connected TV ad spending is increasing significantly, but it still faces issues when it comes to the fragmentation of inventory, lack of standardized measurements, frequency capping and ad fraud. In our newest report on US digital video, we looked at connected TV’s limitations and what leaders in the industry think.

Advertiser investment in connected TV (CTV) is ramping up quickly as more inventory becomes available, with YouTube, Hulu and Roku dominating the landscape. We estimate CTV ad spending in the US will reach $10.81 billion by 2021, up from close to $7 billion in 2019. But still, challenges remain, including fragmented inventory, ad fraud and frequency capping.