DEC 29, 2021
The fastest growing video advertising platform is now CTV
OCT 13, 2021
Marketers are expected to allocate more ad dollars to Connected TV as content and usage increase. ... [+] ASSOCIATED PRESS
During the pandemic Connected TV was established as a video source for millions of homebound viewers. Even as the growth of broadband connections has plateaued, marketers have allocated more ad dollars on CTV. A series of recent surveys report the continued acceptance of CTV with programmers, advertisers and viewers with strong growth forecasts for the years ahead.
In a survey, Leichtman Research Group said over 80% of TV households have at least one connected TV device (a penetration higher than cable TV), with a mean of 4.1 devices per connected TV household. The study also found 39% of adults watch streaming video content daily and 60% watch weekly. These figures are nearly identical with last year, an indication that post-pandemic CTV viewing has not tailed off. To no one’s surprise young adults are the heaviest viewers of CTV.
In addition, Vizio, a manufacturer of smart TVs, has seen a sizable shift in viewing behavior over a short period of time. Vizio reports that nowadays about one-third of all TV viewing is linear compared to 60% from just two years ago as viewers migrate to streaming video. The recent roll-out of new streaming providers with award-winning premium content has helped to fuel consumer adoption.
While several prominent streaming providers do not have ads, marketers are continuing to support CTV. In their latest ad spend projections released in September, IPG MAGNA is forecasting CTV ad spend to grow by 34% in 2021 totaling $5.4 billion for the year. By comparison, in 2021 ad dollars for national TV (broadcast and cable) is expected to grow by a more modest 7.4%. For 2022, MAGNA is projecting continued growth with a year-over-year ad spend increase of 28.4% reaching nearly $7 billion in ad dollars.
Network executives cited the 2021 TV upfronts as “one for the ages” and a “watershed moment” with percent double-digit increases in CPMs. Helping to drive that growth was CTV which reportedly accounted for an estimated 20% to 30% of ad dollars. eMarketer reported that for upfront negotiations TV buyers had ramped up their ad spend for CTV by nearly 50%, totaling $4.5 billion in ad dollars.
An Innovid/ANA report in 2020 said CTV accounted for 40% of all digital video impressions shares, up from 31% in 2019. Mobile video continues to have the highest share of video impressions at 43% (down from 48%). The digital video share of desktop video impressions had declined from 46% in 2016 to 16% in 2020. A recent survey on TV convergence from TVSquared found nearly three in four respondents say “TV” is now defined as linear and streaming.
Helping to drive viewers to CTV has been YouTube which, of late, has been prioritizing CTV over other screens. Both Nielsen and Comscore SCOR +2.2% rank YouTube and Netflix NFLX +0.8% as the leaders in time spent viewing streaming content on CTVs. eMarketer says YouTube CTV viewers grow by nearly 63% in 2020 and over 50% of YouTube content is now viewed on CTV.
This month, Comscore announced they are the first company to be live with cross platform measurement of YouTube and YouTube TV including desktop, mobile and CTV. Included in the initiative will be co-viewing and de-duplicated reach measurement. According to Comscore’s Chief Commercial Officer Chris Wilson, this new capability solves a critical industry need and means that brands and agencies now have a significantly enhanced ability to plan and measure deduplicated reach and frequency of their campaigns.
YouTube has also enabled viewers to shop on CTV by allowing viewers to link to the advertiser’s website at the bottom of the screen. In addition, Google GOOG +0.9% will provide such lower funnel attributes as website traffic, sign-ups and purchases. A Criteo survey found 44% of Americans confirm video streaming has influenced purchasing decisions in the last 12 months.
Another survey from The Trade Desk found 70% of advertisers say their top priority for 2021 TV investments is linking video investments to business outcomes. The survey also highlighted other reasons for advertisers support of CTV. For example, as the median age of the linear TV continues to get older, 28% of marketers cited CTV’s ability to reach younger consumers and cord cutters. Another 28% cited CTV’s ability to provide incremental reach to linear TV. In addition, the survey found 45% of advertisers grew their CTV ad budget in the past year and 91% will either maintain or grow the CTV ad spend in the next year. An overwhelming majority of advertisers (92%) viewed CTV as just as effective if not more so than linear TV.
Helping to fuel advertiser growth is the widespread availability to buy CTV advertising inventory. The providers can come from network streaming extensions (e.g., Discovery+, HBO Max, Paramount+, Peacock, etc., Smart TV manufacturers/OEMs (e.g., LG, Samsung, Vizio with Amazon and Comcast CCZ +2.8% introducing their own Smart TVs), TV station group OTT endeavors (e.g., Hearst Anyscreen, E. W. Scripps Octane, Sinclair Compulse, Tegna Premion, etc.) CTV devices (e.g., Amazon Fire Stick, Apple TV 4K, Chromecast, Roku, etc.) and Omnichannel platforms (e.g., Freewheel, Magnite/spotX, Roku/OneView, The Trade Desk, Yahoo/Verizon VZ 0.0% CTV, etc.).
The emergence of CTV as an advertising platform is widely expected to push all of television to an impression-based negotiation currency. The TVSquared survey found 73% of marketers believe all forms of TV should be sold on impressions. Furthermore, 80% of those surveyed said the upfronts need to be more data-driven. The survey also found that 57% of marketers believe accuracy of cross-platform TV measurement and attribution is one of the biggest challenges in converged TV advertising.
Other findings from the TVSquared survey include:
Keith Zubchevich, CEO of Conviva, says, “CTV audience measurement is currently isolated and broken compared to linear TV and digital audience measurement, creating major challenges to monetization for streaming publishers, especially those who are ad supported. With the majority of viewing transitioning to CTV by 2022, the advertising industry must come up with a solution quickly in order for traditional broadcast publishers to survive the transition and for emerging AVOD streaming services to succeed.”
As media conglomerates such as Disney DIS -0.1% and Comcast place a greater content priority on streaming it has promoted consumers canceling their cable subscription. A study from Parks Associates says over one-third of U.S. broadband (38 million households) are cord-cutters. Over the next five years, Kagan projects cord cutting will result in a revenue loss from $91.1 billion in 2021 to $64.7 billion by 2025.
A study from Criteo found 61% of Americans say subscription cost is their top consideration for using a video streaming service. The survey found 3 in 5 are happy to watch video streaming services with a fully or partially ad-funded subscription. Trade Desk found 64% of consumers don’t want to spend over $30 each month on streaming video, making ad supported content more appealing.
A cord cutting survey from Pew Research said 71% of those who cancelled their cable or satellite subscription said they can access the content they want online, 69% said the cost of cable and satellite services is too high and 45% say they do not often watch TV. Pew found 34% of Americans age 18-to-29 now get TV through cable or satellite, down by 31% from 2015. Moreover, fewer than half (46%) of those age 30-to-49 currently get TV via cable or satellite, down by 27% from 2015.
With premium content, blue-chip advertisers support and consumer support, CTVs future looks strong although there are a few lingering issues besides audience measurement. CTV is a digital medium and similar to other platforms they are susceptible to bots and ad fraud. In addition, CTV ads can be acquired using an aggregate of different sources, the myriad of ad servers used makes it different to control the frequency of ads, frustrating not only marketers but also viewers.
Mitch Oscar, Director of Advanced TV strategy, USIM says, “Given CTVs momentous momentum through its engagement with blue chip advertisers and consumers, as viewers and subscribers/ registrants, the platforms need to concentrate their efforts on a few lingering issues in concert with their endeavor to provide enhanced audience metrics (viewership, attribution and cross platform pollination): ad fraud; campaign multi-platform inventory and viewer delivery de-duplication, such as frequency capping, recency divides, competitive separation; standardization of terminology that is not only reliant on the MRC’s most recent OTT/ CTV definition; more visibility into platform viewer delivery through authenticated vs. free content for a better understanding of linear TV reach extension capabilities; and solving the co-viewing vs. single viewed impression delivery conundrum, to name a few, in order maximize revenue generation.”