Should Connected TV be your Next Performance Channel?
Long-gone are the days where families fought for the remote and structured their evenings around the TV guide in the weekly magazine. For years, Linear TV has remained a main source of entertainment and, as a top-of-the-funnel medium, has been fundamental for building brand awareness. CTV has changed those dynamics significantly as more advertisers are choosing CTV ads as a preferred channel.
This dominance has shifted over the last decade with Over-the-Top Subscription Video-on-Demand (OTT SVoD) services – Netflix, Disney+, Amazon Prime – transforming our viewing behaviour and raising questions over Linear TV’s ability to accurately forecast and track key audiences. The digital disruption of television has continued with Connected TV (CTV) viewership hitting new heights during the pandemic. As CTV ads quickly became one of digital advertising’s fastest growing channels, Linear TV saw ad spend decline by 24% in 2020.
The TV marketspace is constantly updated with new offerings and shifting consumer demands. Changing consumer viewing habits and the rise of streaming services have driven a wedge through TV ad spend, prompting advertisers to reconsider how they allocate their spend.
Is Connected TV Really Growing That Fast?
- With digital adoption accelerated by the pandemic, we’ve seen the TV ecosystem evolve faster than ever before.
- 2020 drove a surge in time spent viewing streaming services, which among Samsung TVs alone grew 62%.
- Across all streaming platforms, viewership time increased in 2020 with absolute time spent in Subscription Services (SVoD) up 43% as viewers adopt ad-supported environments.
- 2020 saw advertising video-on-demand (AVoD) grow 60%, broadcaster video-on-demand BVoD grow by 21% and transactional video on demand experience a 17% rise.
- CTV was Trade Desk’s fastest-growing channel with a higher growth rate than the overall ad business. The number of CTV advertisers on its platform topped 10,000 in the second quarter, an increase of more than 50% year-over-year.
Why Are Brands Turning to Connected TV?
It’s not a question of saving budget but using CTV ads to make your budget work harder with an opportunity to deliver great value. The cost of entry for CTV ads is much lower than on Linear, giving brands access to the open internet, improved targeting capabilities, and inventory selection. Marketers can deliver ads to hard-to-reach, niche audiences, increase ad relevance to match consumer preferences, and bridge the gap between online & offline behaviours.
Like other programmatic media buys, CTV ads campaign set-up and targeting allows marketers to track performance and use data to optimise getting more ‘bang for your buck’. This isn’t the case on Linear, where a performance report is generated once the ad placement has reached completion.
Targeting
Marketers can unlock data that would not have been possible with Linear TV with improved targeting accuracy, measurement, and attribution. Digital footprints can be used to identify consumers across multiple devices and restrict the number of times an advert is served to a viewer at one-time. As viewers continue to consume digital content, marketers can use both demographic and behavioural targeting to discover new audiences. Brands can curate a more relevant advertising experience with improved visibility on link and tag data from webpages their audiences visit, the types of content consumed, and past online searches.
Engagement
Viewer dwelling time increases as they actively curate their own streaming experience choosing what to watch and when, providing marketers with more opportunity to gather viewer data and optimise campaign performance. Consumers are also more open to being served marketing in exchange for personalised product recommendations and streaming suggestions.
What are the Barriers to Connected TV?
A lack of knowledge
23.9% of respondents felt unsure of the benefits and 22.9% highlighted their limited tech infrastructure restricting their ability to invest in CTV advertising. There’s a clear demand for CTV fluency, with half of UK advertisers fearing they’re not effectively leveraging digital platforms to reach their key audiences. Mastering new technologies and content recognition tools in CTV apps will support marketers in stringing together their targeting, measurement and optimisation capabilities.
A fragmented marketspace
Although CTV offers accurate consumer data, it’s siloed on different platforms making addressability a concern. Companies with the least TV inventory have the most viewer data (direct-to-consumer apps and smart TVs), while programmers controlling the TV inventory need to own the distribution channel to access this data. With content hosted across multiple apps and devices and consumers using an array of services to stream content, having a clear understanding of an individual’s digital footprint is challenging.
Brands without direct-to-consumer apps and no visibility on customer data should negotiate with digital MVPDs and platforms like Amazon Fire TV and Apple TV, to identify what audience and measurement data can be used to improve their ad inventory.
Points to Consider When Defining your TV Budget
By 2022, Linear TV is forecast to see a 1.5% compound annual growth so it may not be going anywhere but we are definitely going to see a rebalance in prioritisation for brands. Working to capitalise on linear TV’s ability to reach older audiences, Netflix has begun trialling its first programmed linear content channel in France to remain competitive. Similarly, Crackle TV’s ‘Always-On’ ad-supported streaming platform enables audiences to avoid browser fatigue, replicating the traditional linear experience with the ability to stream scheduled content. This cross-channel coordination with data-driven connected TV shows Linear’ s fundamental role in full-funnel attribution. And as markets continue to adapt, brands need consider their marketing objectives when deciding on the most effective medium, or a combination, to drive performance.
Here’s four points for you to consider when deciding if Connected TV is the right medium for your brand:
1 – CTV can fit seamlessly within an omnichannel strategy: Explore running CTV ad campaigns alongside existing media channels i.e., display, social, out-of-home, audio to drive return-on-advertising-spend.
2 – Review your marketing objectives: This is crucial in assessing which medium is best placed to support your strategy and striking an effective balance of both Linear and CTV to drive performance.
3 – Explore an omni-channel approach driven by first-party data: Adopting an omni-channel strategy will allow marketers to reach more consumers and prioritise first-party data to collate consumer viewing data to optimise re-targeting and engagement.
4 – Stay agile with tech partners: Keep an eye on evolving channels like CTV, the value of audience-based buying, and ways their tech partners can help them navigate consumer viewing habits and unlock the full potential of both Linear and CTV.
Hear more about the innovative CTV strategies we’ve executed for global clients.
