By Paige Bilins, VP of Video Product at Magnite
As the year closes out, it’s time to take stock of how our industry has evolved and where we’re headed. While almost every corner of digital advertising has experienced change this year, CTV has certainly seen a notable uptick in investment, driven by consumer trends: 80 percent of U.S. households now stream video to a connected device.
Looking toward the new year, CTV investment is only expected to increase as more buyers make the resolution to add the channel to their media mix. According to eMarketer, CTV advertising will be an $11 billion industry in the U.S. by next year. With that in mind, let’s look at what we can expect in 2021 as CTV advertising gains greater momentum.
1) Finally, Addressability
Marketers are getting closer to being able to reach the right person at the right place at the right time with CTV’s addressability potential. A recent study found people accurately remembered 74% of imagery seen in addressable TV ads, compared with 68% for non-addressable TV ads.
The recent success driving addressable campaigns for major brands utilizing audience segments from partners such as Acxiom, Comscore, LiveRamp, and Epsilon provides a clear indication that addressable campaigns will be a mainstay of CTV advertising for years to come. While fragmented infrastructure and technical challenges have hindered the scale of addressability in the linear world, those issues are overcome in CTV through impression-based buying across platforms and tools that allow for the safe exchange of data.
In addition to a TV viewing experience with large screens and highly engaged audiences, CTV gives advertisers digital-first advantages including data targeting at a request level (demographics, psychographics, location), real-time ad performance reports and engagement metrics.
Meanwhile, privacy regulation and the eventual demise of the third party cookie further highlights the importance of advertising infrastructure that ensures transparent value exchange with viewers. CTV relies on privacy-compliant identifiers and publisher first-party data, which will be more relevant than ever in shaping the future of targeting and addressability in digital advertising.
2) Programmatic Tips the CTV Scale
The silos between old and new will continue to fade in digital media as we enter a new year. We expect to see CTV publishers making progress in bridging their traditional sales teams with programmatic, with the goal of viewing and managing all demand holistically. Deal types such as programmatic guaranteed (PG) are making buying and selling CTV inventory more efficient. PG deals bring the stability of guaranteed revenue together with the automation and flexibility of programmatic transactions.
We see a similar trend happening on the buy-side as well. Consolidating investment within an automated buying system gives buyers more efficiency through scale. And with much of CTV transacting through deals, both PG and private marketplaces, buyers don’t have to trade quality and brand safety to achieve scale.
3) Investing in Good Viewer Ad Experiences
As consumers gravitate to ad-supported services to cut down on costs, time spent streaming ad-supported video is rivaling SVOD viewing. That being said, with new streaming services continually debuting, the need to build viewer loyalty is at an all-time high. CTV publishers need to ensure they provide an ad experience fit for a big-screen, lean-back environment, which translates into tools specifically made for frequency management, competitive separation and creative quality.
Along that vein, CTV isn’t limited to 60, 30 or 15-second spots and is ripe for content and ad format innovation that complements the viewer experience. Sling TV offers a watch party feature that allows a viewer to watch live TV while video chatting up to three friends. Another is Hulu’s user interface upgrade which provides a more navigation-friendly design. As such new innovations in CTV develop, advertisers will have more ways to engage with audiences.
4) CTV Cracks the Last Cable Hold-outs
In 2020, more audiences looked to CTV for sports and political coverage and this trend will continue in 2021. While sports coverage was once the saving grace of cable TV, that may no longer be the case. According to Conviva, NFL viewing time on connected devices increased by 38% in Q3 2020 versus a year ago. As viewership to streaming services increases, sports viewership is following in the wake. Emarketer reports a 50% increase in vMVPD live sports viewers over the past two years, with another 19% forecasted by 2022.
Meanwhile, in politics and news, more audiences are tuning into CTV to keep up with current events. Leading up to the November elections, we saw increased CTV investment from political advertisers looking to reach addressable audiences. More political ad dollars went to CTV this year than any previous presidential election in history and the run-off Senate seat elections in January are likely to spur an unprecedented ad spend blitz. Political advertising has long been associated with traditional TV spending but CTV is increasingly gaining momentum and non-political advertisers are taking note as well.
CTV is a Bright Spot for 2021
The future of CTV remains bright, presenting a massive opportunity for advertisers looking to reach addressable audiences at scale. This new year, CTV will be far from “an old acquaintance be forgot and never brought to mind” — but will take full focus as a growth driver shaping the future of advertising.