Connected television (CTV) is a rapidly evolving part of the media landscape and new innovations in technology are exponentially increasing the number of options content creators have at their disposal. The effect of this is highlighted by the huge increase in the popularity of CTV amongst American media consumers, in fact, according to the Gartner for Marketers study and report: “Gartner Consumer Data: Streaming TV Implications for Your Advertising Media Plans”, 63% of the average amount of time spent on consuming television was dedicated to online streaming. Viewers are more engaged with their content than ever and adults aged 18-40 are spending more time on CTV platforms than cable and satellite.
The benefits of CTV are readily apparent to the myriad of companies that have already entered the market, yet many continue to lag behind in taking advantage of the opportunities it offers. The foremost prediction for CTV is that more companies will begin to realize that the future of media lies in streaming content.
This applies to conventional media outlets, animation studios, holding companies, and a variety of other areas. All of them can leverage real value from CTV based advertising to boost their own production and profits. There are three key factors in this process, so let’s begin with an overview of CTV advertising.
CTV Advertising
To say that the future of TV advertising lies in CTV would be a gross understatement as it ensures that viewers can be targeted with ads across all their devices, and sometimes even at the same time. Advertisers have realized en masse that they can enjoy unprecedented access to consumers via CTV to achieve greater ad-targeting than what would ever have been possible via conventional TV. As a result, advertising spending on the CTV market has increased by over 35% since 2020 and further growth is expected in the coming years, and there are a number of reasons for this trend.
The first key factor is reach, where advertisers are able to enjoy unprecedented access to media consumers (remember the point about multiple ads appearing on multiple platforms at the same time). This gives advertisers the impetus to experiment with different forms of ad content and makes the content the ads support more acceptable to the average viewer.
Another key issue to consider is frequency as ads on CTV platforms don’t have to be run to the same intense schedule as would be the case on conventional TV. The approach CTV allows for is very much based on quality rather than quantity as ads can be more specifically targeted to users based on key interests.
The overall benefits of CTV advertising can thus be distilled down into three key points, the first of which is closely related to reach: Consumption stability.
1. Stable Media Consumption
Advertisers can take advantage of CTV as its viewer base is much more stable as opposed to conventional TV. Firstly, when it comes to advertising specifically, on conventional TV it’s simple for viewers to avoid consuming ad content that they’re not interested in by skipping channels during ad breaks, which naturally doesn’t work to the same effect while consuming CTV-based content. Media consumers consistently report that they are more engaged with videos while watching them on CTV, meaning an advert has a larger, more stable audience.
There are a number of reasons for this, starting with the fact that not only are viewers unable to skip over to another channel but the ads themselves are not skippable either, guaranteeing a stable captive audience. Such ads are also generally shorter which ensures a greater degree of retention, and they also tend to be higher quality and more specifically targeted to specific demographic groups based on the content they consume. Ad-free services do exist of course, and a number of paid services offer an ad-free experience for an extra fee, but these are outliers rather than the norm.
2. Precision Targeting
All of the factors outlined above are made possible thanks to precision targeting, in fact, marketers are able to make their advertising content more precise than they could possibly have achieved on conventional TV. Old school advertising was always about attempting to target a wide group of people, appealing to the lowest possible denominator to ensure that your message would land. This approach could be compared to aerial bombing, dropping a large number of ‘bombs’ onto a wide geographical area, hoping to hit as many targets as possible.
CTV based ads can be targeted using demographic data based on the profile of a show, film, or platform’s particular audience, which makes it possible to be far more precise than would previously have been possible. If conventional TV ads were bombs dropped from a great height by an aircraft, the benefits of CTV-based advertising could best be described as cruise missiles, able to hit a precise target with a greater degree of accuracy. This high level of efficacy means that advertisers can take greater risks and experiment with the content that they produce based on a solid bedrock of high-quality data, giving them the insurance to take risks for better, newer content.
3. Improved Campaigning Performance
The upshot of factors like precision targeting results in advertising creators being able to enjoy significantly improved campaign performance, and the reasons for this are fairly apparent. Increased targeting precision means that marketers end up getting ‘more bang for buck’ and that little to no money is wasted on ads that aren’t effective or targeted at the right audience. The stable media consumer environment and the focus on creating quality ad content over the quality approach utilized in conventional television mean that whatever campaign you run is likely to be successful.
The is best run as an omnichannel approach, ensuring that content appears on multiple platforms at the same time as its CTV appearances. Using different ad formats, that contain the same overall message, for CTV streaming platforms, as well as social media, google, etc, is a sure way to maximize the potential of whatever ads. Media companies that run this sort of campaign should ensure that they retain the same core message throughout
The Takeaway
Media companies can gain considerably from CTV-based advertising thanks to the triptych of benefits it entails. The stable media environment ensures that viewers are glued to your content, making it more likely that they will become ‘return customers’ via increased engagement. Precision targeting means that you get ‘great bang for buck’ and can reduce your costs while increasing efficiency.
Finally, these two factors combine to ensure that marketing campaigns you run, or indeed any sort of CTV-based campaign, are more likely to succeed. You can use this stability to plan content longer-term without worrying about fickle audiences using interest. These factors, amongst others, are why media companies can benefit from CTV based advertising.