Sometimes, significant transformations can occur without us even realizing it. Take the realm of television, for instance. While your TV set itself may not have undergone any noticeable alterations recently, the landscape of television services has evolved dramatically.
You might have noticed these changes in the form of cutting the cable cord to save money, incorporating streaming devices like Roku or Amazon Fire for enhanced flexibility and content variety, or even the growing trend of casting video channels from smartphones for entertainment purposes. These shifts in how consumers access streaming TV channels and online video content fall under the umbrella of “connected TV” or CTV, and they are shaping significant trends, especially in the world of advertising.
RELATED: In The Month Of June, Brands Achieved A Significant Milestone By Reaching A Monthly Ad Spend Of $1 Billion On Connected TV (CTV) Advertising
According to Doug Gould, a professor of advertising at Boston University’s College of Communication, CTV represents not a distinct type of TV but a novel approach to television consumption. Traditional TV, as we’ve known it since childhood, is now referred to as linear TV (LTV). This transition from linear TV to streaming TV and the current era of on-demand video and online channels or apps like Pluto TV and Tubi has occurred rapidly. Recent years have witnessed a rapid expansion in the percentage of households with CTV while traditional cable or pay-TV subscriptions have dwindled.
RELATED: Understanding Connected TV: The Future Of Television
Terence Scroope, Vice President of Insights & Solutions at Tremor Video, a video advertising company specializing in CTV, instream, and in-app advertising, emphasizes that CTV has a robust presence with an 80 percent device penetration rate, while only 66 percent of households have paid TV. This shift is progressively eroding the traditional broadcast market’s dominance and capturing more attention and consumer focus.
The COVID-19 pandemic further accelerated the CTV trend in 2020, with more individuals staying home and accessing content via connected TV devices. Danielle DeLauro, Executive Vice President of VAB, a New York City-based video advertising insights-driven organization, notes that after years of steady growth, the pandemic expedited CTV’s trial and adoption, with two out of three consumers being open to exploring new platforms.
While CTV may feel familiar to traditional TV viewers due to its user-friendly features, onscreen menus, and varied subscription options, its growth carries significant implications for advertisers. Scroope explains that the target audience for traditional linear TV is dwindling, necessitating the inclusion of CTV in advertising budgets to reach potential audience segments effectively.
RELATED: What Is The Difference Between Connected TV (CTV) And Over-The-Top (OTT)?
Historically, advertising buyers focused on either digital or TV placements. However, CTV is bridging this gap. Les Seifer, Vice President and Head of Creative at Tremor Video, predicts that the distinction between linear TV and mobile or desktop screens will fade over time, making CTV advertising opportunities even more attractive.
The growth in CTV advertising is substantial. According to eMarketer, U.S. advertising spending on CTV ads will rise from $11 billion in 2021 to $18 billion in 2024. This explosive growth is propelled by CTV’s unique value proposition. DeLauro highlights that CTV provides data-driven targeting and lighter commercial loads in a premium video environment, offering advertisers a relevant and highly engaged audience. Additionally, CTV enables brands to experiment with non-traditional creative formats, such as interactive or shoppable ads.
CTV ads’ dynamic and adaptable nature allows brands greater control over the messages their audience sees. For example, a car company can enhance a basic video ad by adding digital overlays or branded frames around the video in a CTV environment to make it more relevant to different audiences.
Gould points out that CTV is particularly effective at reaching younger audiences, as cord-cutters tend to skew younger, while traditional TV viewers are aging. This shift is significant because brand loyalty often forms during youth, making it crucial for brands to remain relevant to younger audiences through CTV.
In conclusion, while consumers may be focused on the content quality of streaming services or the display technology of TVs, brand and advertising executives must pay attention to the transformative impact of CTV on future advertising spending and its potential to reach customers effectively. Tremor outlines the opportunities for advertisers in this evolving landscape, emphasizing that CTV should be a consideration for premium video advertisers looking to extend their reach or experiment in a low-barrier, test-and-learn environment. With the pandemic driving one out of three people to add a streaming service, viewers now seamlessly switch between traditional and streaming environments, making CTV an indispensable element for advertisers seeking to maximize revenue and potential.
Download The Radiant App To Start Watching!
Web: Watch Now
LGTV™: Download
ROKU™: Download
XBox™: Download
Samsung TV™: Download
Amazon Fire TV™: Download
Android TV™: Download