Darrick Li says a thriving FAST and AVOD market will soon see Canada catch up to the U.S. in digital video ad spend.

The North American VP of sales for research and measurement co Guideline says media buyers should watch out for “massive growth in digital video” in Canada next year, despite Q3 data from this year showing a downtick in ad spend. 

Guideline is the newly rebranded organization that acquired the Standard Media Index (SMI) in June 2022 (along with SQAD and Lumina more recently). Its latest report points to a relatively flat quarter, but Li notes there are signs of growth and opportunity. 

The report highlights a sharp decline in overall ad spending in September specifically (-11%, the first double-digit decrease in over a year) across traditional media channels like print and linear TV. However, Li notes that there was a similar dip in the U.S. a couple of years ago, but that decline was offset by increases in ad spending across OTV and CTV channels.

In Canada, “the recent decline [in traditional ad spend] has outpaced the increases across digital channels,” Li explains, adding that the domestic streaming market is growing, but isn’t as mature as it is south of the border. 

With Corus launching Pluto TV last December–opening up the ad-supported service to all advertisers in Canada in April–along with Tubi (Rogers), Netflix and Disney+’s  ad-supported tiers and Free Ad-Supported Streaming Television (FAST) channels in general gaining popularity with Canadian viewers, Li says we’re starting to see the “maturity and scale on the buy side for premium digital for the first time in a long time,” in Canada. 

“That’s what I would be watching for next year. We are going to see digital video start to outpace the market in general, and outpace the decline we’re going to continue seeing in linear [TV] in the near term.”

Across the digital media mix, Li says the Guideline data shows a significant increase in audio ad spending, up 20% ahead of digital video (+9%), search (+2%), and display advertising (-1%).

Within the growing digital audio category, Li says podcast spending has flattened slightly (-3%), while non-podcast streaming audio grew 23%. The uptick was due in large part to the ongoing popularity of Spotify, significant growth of streaming audio inventory on programmatic DSPs (specifically Trade Desk, Li notes) and the continued growth of CPG spending, which was the largest-spending category on streaming audio. Within CPG, non-alcoholic beverages led the category in Q3 (+89.2%), followed by new spending from QSR brands (+224%) and wellness brands (+296%).

Traditional radio was impacted significantly over the pandemic as homebound audiences weren’t listening in their cars, Li notes, but it remains relatively flat over Q3 this year (+4%).

In terms of Q3 timing, pharmaceutical and wellness were the leading ad spend categories due to cold and flu season, collectively growing 20% year-over-year.