Global growth in ad spend on video-on-demand is outpacing traditional media

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The growth in ad spend on video-on-demand services is outpacing expenditure on other media such as paid-for search advertising and traditional formats such as TV and print.

The global market is projected to be worth $47 billion by 2023, almost double its 2018 value. China is currently leading the market for advertising on video-on-demand services (also known as streaming), with brands expected to spend $8 billion in 2018, beating the U.S., which is set to spend $7.9 billion, according to data from consultancy World Advertising Research Center (WARC) published Friday.

Ad-funded video-on-demand services in the U.S. include Hulu and HBO Now, distinct from Netflix for example, which people pay a monthly subscription to use and has no external advertising. Together, the two types of video-on-demand platform (known as over-the-top or OTT), are set to be worth $68.7 billion globally in 2018, up 28.7 percent on last year's $53.3 billion value.

Spending on traditional (or linear) TV advertising, meanwhile, is set to grow 1.1 percent to $139.9 billion in 2018, with radio adspend set to grow 0.6 percent to $24.4 billion worldwide.

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Paid-for search advertising on platforms such as Google is set to grow 11.8 percent to $103 billion, while online display ads are set to grow 14.8 percent to $68.1 billion worldwide.

Services like Netflix have increased people's desire to watch shows anytime and anywhere, but as they don't carry ads, brands will increasingly look to other video-on-demand platforms to reach audiences with advertising, according to WARC's Data Editor James McDonald.

"This is why AT&T and Amazon are exploring moves into the AVOD (ad-funded video-on-demand) sector next year, with the ultimate aim of taking the lion's share of a market expected to be worth $47bn by 2023," he said in a statement emailed to CNBC.

Hundreds of thousands of U.S. households have "cut the cord," or canceled their cable TV subscriptions, and 59.5 million homes used video-on-demand services as of April 2018, up 17 percent year-on-year according to comScore data. Seventy-three percent of homes using video-on-demand subscribe to Netflix, 50 percent use YouTube, 36 percent subscribe to Amazon Prime and 28 percent use Hulu.

As well as being a big spender on ads within video-on-demand shows, China is also spending a lot on TV programs, according to August data from IHS Markit. China is now the world's second-highest spender on television shows after the U.S., with its annual expenditure hitting $10.9 billion in 2017.

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It beat the U.K., with a spend of $10 billion, into second place. But both countries' program spend is dwarfed by the U.S., which spent $58.3 billion on content.

The Chinese figure includes broadcast or linear TV as well as online services including Baidu, Alibaba and Tencent. Online platforms spent $4.5 billion on programming in 2017 and IHS Markit expects this to rise in 2018, beating the $6.4 billion linear TV stations spent on programming.

Baidu is the majority owner of Chinese platform iQiyi, which had 67.1 million subscribers at the end of June, an increase of 75 percent a year previously. Netflix, which had 130 million subscribers at the end of June, has provided some of its content to iQiyi so it can enter the Chinese market.

Disclosure: Comcast, which owns CNBC parent NBCUniversal, is a co-owner of Hulu