All to play for: gaming and CTV set to drive £4bn in adspend by 2026

Adspend across the connected TV (CTV) and gaming markets in the UK is forecast to double over the next three years to reach a combined £4.15bn in 2026.

New research from IAB UK shows that adspend in CTV is set to grow from £1.17bn in 2021 to £2.31bn in 2026. The findings, which include broadcast video on-demand and YouTube, are a result of an ongoing shift to streaming among consumers, as well as a rise in ad-supported viewing as consumers look to cut down on subscription spend.

Netflix and Disney+ released new ad-supported tiers at the end of 2022 and are set to drive further growth, said IAB UK.

The research is part of the IAB Compass report, created with research consultancy MTM, which looks at the development of augmented and virtual reality (AR/VR), CTV, gaming and shoppable advertising.

IAB UK points to CTV adoption closing in linear TV and digital video. But despite an annual average growth of 40% since 2017, the report identifies the need to address fragmentation, standardisation and measurement challenges for the channel to fully mature.

Hannah Bewley, Senior Research and Measurement Manager at IAB UK, said: “While we're under no illusion about the challenges of the current economic climate, digital advertising will continue to innovate to offer advertisers unique and creative ways to deliver on brand and performance objectives.”

Evolution of gaming ad real estate to reap spend

The plethora of ad solutions in the gaming channel – including native in-game formats and programmatic buying – and the adoption of gaming by advertisers in a range of sectors is expected to drive annual spend from £815m this year, to £1.84bn by 2026.

The continued development of ad formats that minimise disruption of gameplay will continue to boost growth, said the research. Currently, gaming adspend is centred on mobile gaming, but the channel could accelerate if advertisers embrace PC or console gaming.

IAB UK predicts adspend in AR to reach up to £350m by 2026, while social commerce is set to hit almost £7bn by 2026.

Bewley added: “Between them, these four digital channels are poised to accelerate growth in digital spend over the next few years as advertisers capitalise on the potential for full-funnel marketing, marrying creative storytelling with actionable targeting.”