Is CTV the Future of Video Advertising?

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Connected TV is the latest generation of broadcasting conducted through broadband-connected and streaming devices (media boxes, sticks), video game consoles (PlayStation, Xbox), and other internet-enabled TVs. To put it simply, it’s an internet-sourced video content that can be displayed via multimedia devices. This digital channel has already found a response among Millennials and other generations representatives.

The number of CTV adopters is constantly growing. Last year their number reached up to 182 million in the US alone, and it’s expected to reach over 204 million by 2022, according to eMarketer estimation.

As the audience of CTV is growing, advertisers are getting more interested in this channel as an engagement source. They allocate bigger and bigger budgets for this type of marketing campaign.

Yet, this trend has already become mainstream, and here are 6 reasons why.

Well-accepted by audience

The connected TV provides subscribers with high-quality content for a lower price than cable operators do. Plus, they give them a fair choice to purchase ad-free packages. The latest surveys show that CTV advertising is as relevant or better than traditional TV ad and the vast majority of the audience considers it reasonable to watch advertisements in exchange for content.

Such voluntary barter suggests that viewers have a friendly perception of the commercials. Responding to this healthy indicator, the US digital video advertising market increasing its overall spendings.

Reaching cord-nevers

Television generation changes, so do the generation by itself. Recent studies on connected TV viewers in the US are showing that Gen Y representatives prefer to be in a CTV-only house, and that the number of cord-cutters and cord-nevers is following this tendency. It’s coherent to assume, that Gen Z is likely to take over the baton.

The rhythm of modern life is accompanied by 24/7 online status. With Netflix-kind services, all top-rated video content is available on mobile now. Generations X and Y are loyal consumers of mobile content. They are constantly swiping socials’ timelines, chatting with each other, watching favorite movies and serials and this is where ad triggers them. Since CTV has become mobile-supported, marketers should consider CTV advertising as a long-lasting platform for their campaigns.

Targeting advertising

From the advertisers’ perspective, CTV is more than just a pool of the audience, but a refined TV commercial channel with precise targeting capabilities. Similar to online advertising, brands can calibrate their campaigns to reach householders.

CTV ads embrace all cross-platform metrics: impressions delivered, completion rate, view-throughs, conversions and more. With this, companies can run data-driven marketing and deliver their ads to the right audience at the right moment. Furthermore, CTV is where advertisers are snapping up cord shavers.

Programmatic option

Brands and agencies can use a programmatic approach for CTV. By alliancing the first- and third-party data, advertisers monetize both premium and remnant demand with the best output. With private marketplace deals, CTV provides high-quality inventory to brands. Despite such kind of auction can’t be reached by every advertiser, those who are in the game receive comprehensive impressions. This is a time-tested way to avoid supply counterfeits. Meanwhile, other methods like RTB and header bidding are also available here.

Big trampoline

The amount of inventory available on CTV is swelling at full pelt. There are clear trends for the revenue growth of connected TV advertising, which is a signal to further expansion of the market. A relatively young TV generation is only at the beginning of its entertainment journey.

A rough competition between CTV providers like Roku, Hulu, Amazon, etc., bring customer attractive pricings. Another trigger for engaging even more viewers. CTV providers are actively competing for a new audience, thus, this fall Roku announced its further expanding the Roku TV™ licensing program into Europe. It’s a positive signal for advertisers who are looking for a wide-capturing marketing channel.

All-size fit

CTV provides small- and medium-sized businesses with the ability to promote themselves through addressable TV as it doesn’t require enormous budgets that national TV broadcasting does. At this point, advertisers can step over the financial threshold and regional brands are capable to use the power of TV. This is another indicator of further development of the connected TV.

Final thoughts

Connected TV is showing remarkable indicators in the audience attraction perspective, which is why capitalization of this market has a skyrocketing value. However, there is a lot of work to be done in terms of anti-fraud activity.

Frauds are where the money is. Thus, they are vigorously diving in this digital pool. As a response, CTV advertisers are combating the challenge of counterfeits inventory supplement. From a brand safety perspective, advertisers can use private marketplace programmatic deals as an antidote and purchase high-quality inventory, but such “medicament” isn’t available for every demand side. Still, facts are hitting hard, and existing figures, analyzes and estimations unequivocally signalize about CTV advertising’s big future ahead.

Yaroslav Kholod

Head of Programmatic Operations at Admixer Technologies
Yaroslav Kholod, Head of Programmatic Operations at Admixer Technologies. Yaroslav has more than 10 years of experience in the digital advertising industry.

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