By Jonathan Skogmo, Founder and CEO of Jukin Media
With the 2020 election season shortly coming to a close, political advertisements are seizing the airwaves as over 600 local, state, and national campaigns vie for votes.
When it comes to courting voters, political marketers, like brands, face a dilemma: how to reach elusive cord-cutters and young voters. Traditional TV has long been the favored medium for campaigns, but with the rise of ad-free SVOD services as the primary source of home entertainment for many Americans, voters are increasingly unreachable on the biggest screen in the home.
Fortunately for campaigners, 2020 has brought a new development in viewing habits that helps solve this challenge: the rise of ad-supported connected TV. In fact, one recent poll shows that political marketers consider connected TV (CTV) the most promising digital development for the 2020 elections cycle. Numbers from industry leaders bear that out — SpotX has seen a 900 percent increase in political ad spending since April on CTV.
With the ability to target local and regional audiences, it’s no wonder that campaigns see value in CTV, which reflects how brand marketers have been turning more attention to the streaming ecosystem. According to eMarketer, CTV ad spend will reach $10.8 billion by 2021. As both political and brand marketers recognize the power of CTV, it signals a bright future for streaming platforms and channels.
COVID-19’s Affect on CTV
As the pandemic has kept people inside and consuming content, viewership has gone up. While CTV advertising was the least impacted by the pandemic, it was nonetheless still affected as most advertisers paused spending and reduced their budgets.
Further contributing to CTV’s rise during the pandemic is the fact that cord-cutting has accelerated, as TechCrunch and others have reported. The number of pay-TV households has declined 7.5 percent in 2020 – the biggest annual drop ever. That means that low-cost or free streaming services have become an even more attractive option to budget-conscious consumers, many of whom are feeling the financial strain from the pandemic.
At Jukin Media, our channels (FailArmy, People Are Awesome, WeatherSpy, and The Pet Collective — which are distributed on 20+ streaming services including Roku, Peacock, PlutoTV, Samsung TV Plus, and XUMO) faced some challenges. We saw increases in viewership by 30+ percent to 7 million monthly hours across our CTV channels and platforms, but we saw dips in ad revenue by up to 20 percent during the early stages of the pandemic. However, as marketers began to gain confidence and ad campaigns have resumed, that increase in viewership has remained steady and translated to corresponding increases in ad revenue.
A Political Bump or Sustained Growth?
With political campaigns pumping billions into ad-supported media, it’s fair to ask whether advertising will continue to grow on CTV even after the election. However, multiple signs point to a lasting shift rather than a flash in the pan. Measurement continues to improve, as evidenced by Nielsen’s recent YouTube TV announcement, which speaks to continued investment in their advanced TV capabilities. Momentum in the industry has continued as established players continue to invest in and enter the space, none bigger than NBCU’s launch of Peacock earlier in 2020, as well as investor confidence, remains high as companies like Roku continue their stock market climbs.
To be sure, the CTV space is still in its nascent stages, and it still faces challenges with measurement and standardization. However, if viewership continues to climb, the industry will only accelerate the speed at which it tackles those shortcomings and despite (or perhaps partially due to) the pandemic, the ad-supported streaming TV ecosystem will come out of 2020 stronger than it was going in.