The Power of CTV Advertising: 13 Reasons to Embrace the Trend

CTV advertising is expected to experience rapid growth and is projected to increase by 13.2% globally in 2023, reaching a total revenue of $25.9 billion according to GroupM’s mid-year forecast.

In today’s digital age, the rise of connected TV (CTV) advertising has opened up new avenues for brands to enhance their marketing strategies. CTV advertising has quickly gained popularity among marketers due to its direct-to-consumer approach, allowing brands to establish direct connections with their target audience.

With its engaging potential, precise targeting capabilities, and impressive results, CTV advertising presents a compelling alternative to traditional advertising channels.

The Connected TV (CTV) Landscape

The CTV landscape, in the context of advertising, refers to the environment and ecosystem surrounding Connected TV (CTV) advertising. It encompasses the platforms, devices, networks, and content that are involved in the delivery and consumption of streaming video content on internet-connected televisions. The CTV landscape has emerged as a result of the shift from traditional linear TV to streaming services, with CTVs such as smart TVs, game consoles, and streaming devices becoming popular among viewers. CTV advertising takes advantage of this landscape by delivering targeted ads to audiences watching streaming video content on their CTV devices. 

Leverage CTV Advertising in Your Marketing Efforts

The Decline of Linear TV Viewership and The Rise of Streaming

There has been a significant decline in linear TV viewership. In Q4 2022, Comcast alone lost 540,000 video subscribers, and between Q4 2021 and Q4 2022, they lost over 2 million subscribers. This decline in traditional pay TV is expected to continue, with projections indicating further decreases in the future. Additionally, the proportion of US households with traditional pay TV is also expected to drop as more consumers shift towards streaming and connected TV options. 

CTV Advertising on The Surge

CTV advertising offers a level of precision targeting that traditional TV advertising can’t match. The rise of Connected TV (CTV) has led to a decline in the number of people using traditional linear TV. In 2023, 88% of U.S. households owned at least one internet-connected TV device, indicating the growing popularity of CTV among consumers. 

This shift towards CTV has impacted linear TV, although it still retains a significant audience, with approximately 68.5 million pay-TV households in the United States. However, the increasing number of households embracing CTV showcases its potential as a powerful platform for brands to reach a larger and more engaged audience.

Find your CTV Audiences

In the rapidly evolving landscape of CTV advertising, programmatic technology continues to evolve and offer numerous benefits to advertisers. By automating and streamlining the buying and selling of ad impressions, programmatic technology enables advertisers to reach their target audience more efficiently while reducing media costs. 

The integration of AI-driven data science tools and custom bidding algorithms further enhances the effectiveness of programmatic advertising, allowing advertisers to customize their approaches and optimize campaign performance. With ongoing advancements in AI technology, programmatic advertising is poised to become even more efficient and impactful in the future.

AI-driven tools will enable marketers to analyze vast amounts of data and gain valuable insights into consumer behavior and preferences, optimizing ad targeting and placement for more personalized and effective marketing campaigns.

Staying up-to-date with these advancing technologies is crucial for advertisers to remain competitive in the digital advertising space. By leveraging the power of programmatic technology and AI, advertisers can stay ahead of the curve and create more personalized and effective marketing campaigns.

Control and High Engagement

CTV advertising enables advertisers to have more control over who sees their ads and how often they are shown. Unlike linear television, CTV allows advertisers to specifically target their desired audience and choose the demographics they want to reach without wasting ad budgets on non-specific audiences. This level of control helps in delivering more relevant and personalized ads to the right viewers, increasing the chances of engagement and conversion.

According to Statista, 30% of advertisers consider detailed reporting, measurement, and insights to be essential components of their advertising campaigns. This indicates that advertisers recognize the importance of having access to comprehensive data and analytics when it comes to CTV advertising. By leveraging detailed reporting and measurement tools, advertisers can gain valuable insights into the performance and effectiveness of their CTV ad campaigns. 

This allows them to make data-driven decisions and optimize their strategies for better results. The ability to track and analyze key metrics such as brand lift, brand awareness, purchase intent, and recall is crucial in understanding the impact of CTV advertising on their target audience and overall campaign success.

Reach your CTV Audiences

Audience Insights and Campaign Success

Connected TV (CTV) advertising has proven to be highly effective compared to traditional TV advertising. Digiday reports that 23% of CTV viewers made a purchase after seeing an ad, while linear TV only achieved a 12% conversion rate. This indicates the superior impact and conversion potential of CTV advertising. Marketers are increasingly turning to CTV due to its numerous benefits, including targeted and engaged audiences, real-time reporting, programmatic advertising capabilities, audience insights, and cost-effective campaigns. 

CTV allows advertisers to deliver personalized and relevant ads, providing a powerful platform to reach their desired audience and drive conversions. Additionally, CTV enables advertisers to gain valuable insights into audience preferences, demographics, and behavior, while offering precise measurement of campaign success through metrics such as impressions, unique impressions, and engagement. This empowers advertisers to optimize their campaigns and maximize their return on investment.

Campaign effectiveness

CTV advertising has gained significant popularity among marketers and agency executives, with around 59% confirming its effectiveness in promoting brand awareness and engagement. Additionally, 39% of survey respondents recommend CTV advertising for increasing the return on ad spend (ROAS). In response to changing customer habits, CTV advertising has emerged as an effective tool for brands to adopt a direct-to-consumer and direct response approach. 

 This shift allows advertisers to target audiences more precisely and engage with them in a personalized manner, leading to improved campaign effectiveness and better ROI as per study conducted by Comscore. With the rise of CTV, brands now have the opportunity to connect with their target audience on a deeper level, driving brand growth and customer loyalty. 

Moreover, a recent study by eMarketer on CTV ad performance metrics worldwide, shows that the video completion rate indicates that viewers engage with videos up to 90 seconds with an impressive engagement rate of 91%. 

Reach your CTV Audiences

Grab Your Audience Attention

According to Comscore’s Brand Survey Lift (BSL) studies, including CTV advertising in the marketing mix can generate a significant impact on brand lift. The studies revealed that CTV advertising resulted in a 25% increase in brand awareness, a 20% boost in purchase intent, and a 25% improvement in recall. 

These findings emphasize the effectiveness of CTV advertising in driving key metrics for brands, including brand awareness, purchase intent, and recall. As a result, CTV advertising holds great potential as a strategy for brands looking to enhance their marketing efforts and achieve better results. 

Technological capabilities

The impressive effectiveness of CTV advertising is driving brands to allocate more of their marketing budget towards it, surpassing the expectations of industry experts. Advertisers are recognizing the potential of CTV’s technological capabilities, such as precise audience targeting and real-time feedback on ad performance, in generating positive outcomes. This increased ad spend on CTV reflects the growing recognition of its ability to reach a receptive audience that not only enjoys watching relevant ads but also converts into customers.

A medium of engaged audiences

CTV advertising effectively engages audiences, with US adults spending an average of 1 hour 44 minutes per day using CTV devices in 2022. This engagement is expected to increase in 2023, with people projected to spend 1 hour 51 minutes per day, showing a 6.73% year-over-year growth. Moreover, the numbers are going to further rise, representing 5.4% a YoY increase. In 2024 users are going to devote almost 2 hours a day, exactly 1h 57 minutes, to consume the video content as per eMarketer forecast. 

Advertisers and brands benefit from the focused attention of CTV viewers, making it a compelling advertising space compared to other environments like social media. Unlike social media, where users may be distracted by other content or engagements, CTV viewers are fully engaged in the content they are watching, providing a prime opportunity for brands to capture their attention and deliver targeted messages. With CTV advertising, brands can ensure that their ads are seen by a captive audience, increasing the chances of driving conversions and achieving campaign objectives.

Real-Time Reporting

CTV advertising provides real-time reporting that is a significant advantage over traditional TV ads, where advertisers have to wait at least one month to receive insights about their campaign’s performance. In the case of Connected TV the data is available in real-time. This means advertisers can access data and metrics about their ad campaigns anytime they want. 

This immediate access to real-time reporting allows advertisers to make timely adjustments and optimize their campaigns for better results. With this level of control and visibility, advertisers can effectively track and measure the effectiveness of their CTV advertising campaigns in real-time, enabling them to make data-driven decisions and maximize their ROI.

Cost-Effective Campaigns

Connected TV (CTV) advertising is a cost-effective option for brands and advertisers. Unlike traditional TV advertising, CTV allows you to reach your target audience on the big screen without the hefty price tag. CTV offers flexibility in pricing structures, such as cost per metric or cost per view, making it more affordable to reach your desired audience. 

Compared to other channels like web or a single device, CTV offers lower impression costs. This is because CTV users often stream content in the company of others, which leads to more views per ad. As a result, advertisers can benefit from reduced impression costs and maximize the value of their ad spend. 

Overall, CTV advertising provides a cost-effective solution for brands and advertisers to reach their target audience on the big screen, while also offering lower impression costs compared to other channels. 

Connected TV Advertising & Cookieless Future

In the coming cookieless era, Connected TV (CTV) advertising emerges as a great solution for companies. Unlike traditional digital advertising that heavily relies on third-party cookies, CTV can deliver relevant ads without depending on them. 

CTV has always operated without cookies, utilizing privacy-safe household level targeting based on IP address or device ID to reach desired audiences. Moreover, the ability to reach these audiences is becoming more sophisticated. CTV measurement and data are crucial for supporting a programmatic ecosystem, and fortunately, there is now more privacy-compliant data available than ever before. 

This shift to CTV has become even more crucial in recent times, as the pandemic has accelerated the adoption of connected TV viewing, providing marketers with increasingly sophisticated opportunities to reach their target audiences.

Brands to reach audiences through streaming platforms

In recent years, streaming services have evolved from premium ad-free to offer ad-supported options, making premium content more accessible to a wider audience at a lower price. Netflix was the first to venture into the space, launching its ad-supported offer in November 2022. Priced at $6.99 per month, it provides a more affordable alternative to the ad-free plan. This option is available in several countries, including Australia, Brazil, Canada, France, Germany, Italy, Japan, Korea, Mexico, Spain, the United Kingdom, and the United States. 

Following the pioneer, Disney introduced its ad-supported tier, with the price of $8 a month, in the US on December 8, 2022, with plans to expand to various countries on November 1, 2023. These countries include Europe, Canada, the United States, Australia, Brazil, France, Germany, Italy, Japan, Korea, Mexico, Spain, and the United Kingdom.

Amazon Prime Video is also joining the trend, with its ad-supported platform set to launch in the United States, United Kingdom, Canada, Germany, France, Italy, Spain, Mexico, and Australia. The rollout of this service is expected to commence in early 2024. 

These expansions present exciting opportunities for brands to connect with engaged audiences through CTV advertising and achieve high results in their campaigns. With millions of viewers across these countries, brands can effectively target their message to a wide range of consumers, capitalizing on the growing popularity of streaming services. 

Wrapping up

The rapid growth of CTV advertising presents numerous reasons for brands to embrace this trend. CTV advertising offers a direct-to-consumer approach that establishes direct connections with target audiences. Its engaging potential, precise targeting capabilities, and impressive results make it a compelling alternative to traditional advertising channels. 

Additionally, CTV advertising enhances programmatic advertising, provides control and high engagement, impacts brand lift, engages audiences in real-time, offers cost-effective campaigns, and enables brands to reach audiences through streaming platforms. Embracing CTV advertising allows brands to tap into the power of connected TV and leverage its benefits for effective marketing strategies and business growth. 

Reach your CTV Audiences