How the Streaming Ad Market Is Changing for Better and Worse

TV viewers are moving to streaming faster than ever. Can advertisers keep up?

That’s one big question facing the connected TV ad market, that segment of the digital advertising business that includes almost all streaming video ads, as well as advertising on the smart TV interfaces many of us use every day. The CTV market is expanding rapidly, but it’s also facing some major growing pains as it transforms the television advertising landscape at a rapid clip.

The latest episode of the Variety podcast “Strictly Business” details some of those growing pains, as well as what may be in store for the CTV ad industry as it continues to mature. Dave Bernath, general manager of the Americas at CTV company Wurl, joined the podcast to discuss what he sees as the market’s biggest challenges, including the ongoing struggle to standardize streaming viewership measurement.

“We all groaned about Nielsen forever, but as imperfect as the currency was, it was a currency,” said Bernath, who comes from a cable TV background. “All these basic, fundamental building blocks of measuring audiences were agreed upon, transacted upon. We don’t have that in CTV.”

Other complications include the arrival of Amazon Prime Video on the streaming ad market, which has depressed ad prices across the ecosystem, and the rise of YouTube, which is increasingly dominating TV screens as well as mobile, making it difficult for other players to compete for viewers and ad dollars.

“Essentially one in four hours of streaming today in the U.S. is on YouTube — a sentence that still blows my mind — but it’s likely to be one in three by the end of next year,” Bernath said. “And all the demographics are growing. Call it a demographic tsunami that’s going to creep through the age groups over the next 20-30 years.”

As such, it’s an anxiety-inducing time for content providers and advertisers alike. But Bernath also sees opportunity in the array of new tools now available to those players.

“What makes CTV so exciting is that it’s a digital delivery method that brings to television some of the capabilities that have worked on the web and in mobile,” he said. “Wurl is in the supply enhancement business in many ways on the ad side, and I’m really excited about what we’re able to add to the situation there.”

“Strictly Business” is Variety’s weekly podcast featuring conversations with industry leaders about the business of media and entertainment. (Please click here to subscribe to our free newsletter.) New episodes debut every week and can be downloaded at Apple Podcasts, Amazon Music, Spotify, Google Play, SoundCloud and more.