In this session from the Future of TV Advertising Canada Forum, Darrick Li, Managing Director of Standard Media Index, looks at the driving factors to the ad market rebound in Canada. The presentation illustrates the impact that Linear TV has endured during the pandemic and identifies the growing trends as it relates to Connected TV and ad-supported video-on-demand.
The insights also identify the advertising product category indices against Linear TV and Connected TV and present opportunities for both media owners and advertisers/agencies as the Canadian market looks forward to normal pre-pandemic levels of advertising.
As we close calendar Q3, Canada has reached the inflection point in an ad market rebound. At the start of the pandemic, Canada went through the largest decline in ad expenditure, down 49% in Q2 2020. Fast forward to Q4 2020, Canada was still down -6% versus the same time period in 2020, unlike all other markets that had already rebounded. The market then experienced continuous growth each quarter of 2021 versus 2020 but only in the most recent quarter have we seen consecutive months of growth versus 2019 pre-pandemic levels. July and August 2021 combined are up +13% versus 2019, a positive sign for a strong Q3 and as the market settles into a normal volume of ad expenditure.
In Canada, there has been a tremendous shift of the pendulum to Digital ad spend, accelerated by the pandemic. As of Q2 2021, 56% of the media mix is occupied by Digital, up 13 percentage points from Q2 2019. This shift has come with growth in spend ad-supported OTT streaming content delivered via Connected TVs. Having aligned with the Media Ratings Council definition, SMI is seeing the Connected TV itself becoming more prominent for advertisers. Broadcasters and streaming services like Rogers, Bell, CBC, Corus, Roku, and Amazon are reaching audiences with their premium video-on-demand content, just on newer devices. Combined, the first half of 2021 for CTV was up +200% versus the first half of 2020, and up +800% versus 2019.
CPG and Automotive continue to be the leading advertising categories on Linear TV from a volume perspective. But smaller notable categories driving growth are coming from Apparel & Accessories, Technology, and Retail. Within the Connected TV space, Financial, General Business, Automotive, and Retail are all indexing far above last year. Pharma entered the CTV space this year for the first time and is pacing exactly flat to H1 2020. Two particular categories, Wellness and Apparel & Accessories, have yet to use CTV in the first half of 2021, presenting an opportunity for media owners to introduce new streams of advertising categories.