The shift to streaming platforms is changing TV advertising. More than 39.3 million U.S. households were expected to cut the cord by 2022. An increase to 46.6 million is expected by 2024. Connected TV (CTV) streams ads via services on smart TVs or devices like Roku or Fire Stick. It represents over 80% of all streaming TV views.
For marketers, CTV advertising has many benefits. It moves from linear to CTV for precise targeting and local ad delivery. It also offers high video completion rates, detailed measurement, and quick optimization. These are essentials for performance in today’s digital world. While US linear TV ad spending may drop from $68.35 billion to $64.94 billion by 2026, linear and CTV combined will likely top $100 billion. This shows the growing role of CTV in advertising and digital campaigns.
Key Takeaways
- CTV delivers video ads via streaming services like Roku and Fire Stick.
- More than 39.3 million U.S. households cut the cord by 2022, with 46.6 million expected by 2024.
- CTV represents over 80% of viewing on most streaming TV services.
- CTV ad spending is projected to exceed $100 billion by 2026, combining linear and CTV advertising.
- CTV ads offer precise audience targeting, leading to higher engagement and completion rates.
Introduction to CTV in Marketing
More people are leaving regular TV for on-demand streaming services. This change makes CTV marketing impact more important. Advertisers have a great chance to reach their target audience accurately. With adults in the U.S. watching Connected TV over 123 minutes daily, brands must pay attention to this opportunity.
CTV advertising is different from the broad approach of traditional TV. It places ads in the streaming services and devices viewers prefer. This method is smarter and based on data. The CTV marketing impact includes targeting specific audience groups. It also involves tracking ad views, clicks, and actions right away.
Programmatic CTV campaigns let marketers customize their messages and check their success accurately. Brands can now see how well their ads do in real-time. They make sure every dollar is well-spent. Connected TV reach grows because CTV ads can follow up with people across different devices.
New advertising innovations bring interactive and personal ads to CTV. People don’t skip these ads as much, so more watch the whole thing. Brands can then reach out to these viewers again on other devices. This strengthens their message and boosts the ad’s impact.
In conclusion, the CTV marketing impact is huge. It offers an interactive and detailed way to advertise. As more money goes into CTV, businesses using it can see big gains through smart, data-focused ads.
What Is Connected TV (CTV)?
Connected TV, or CTV, marks a new way people watch shows and how ads reach viewers. It combines TV with internet, adding value for both users and advertisers in the digital world.
Definition of CTV
The CTV definition includes TVs that connect to the internet to stream videos. This means smart TVs or regular TVs that connect through gadgets like Roku and Apple TV. This tech improves the viewing experience and changes how streaming TV advertising works.
Streaming Devices and Platforms
Several devices and platforms lead in streaming TV advertising:
- Roku: It’s easy to use and has lots of shows, making Roku a top choice.
- Apple TV: It works well with Apple gadgets, appealing to those who love tech.
They support services like Netflix, Hulu, and Disney+. This gives advertisers huge opportunities to target their ads.
Interestingly, about 60% of US YouTube watchers use connected TVs. This shows how much US viewers enjoy big screens of smart TVs. Advertisers should note this trend to make their campaigns more effective.
The Evolution of TV Advertising
The way TV advertising has changed is stunning. From old-style broadcasts to today’s Connected TV (CTV), it’s been quite a journey. The history of TV advertising shows a move from targeting everyone at once to reaching people more personally through CTV.
In the past few years, a big change in digital marketing happened. People began choosing streaming services like Hulu, Netflix, HBO Max, and YouTube over traditional TV. This shift means advertisers are spending more on CTV and less on old-style TV.
Linear TV ad spending went up by $1 billion in 2022. But, this increase is small compared to the big drop in how much time people spend watching traditional TV. By 2024, it’s expected to fall to 2 hours and 46 minutes a day from 4 hours and 37 minutes in 2012.
Advertisers are now focusing on CTV because it lets them use clear data about viewers. This makes their ad campaigns more effective. Indeed, 94% say CTV works as well as or better than they hoped in reaching their audience.
Ads are evolving as people’s watching habits change. Looking ahead to 2024, 63% of marketers are putting CTV first in their plans. This means less money is going into traditional TV ads, with a 15% drop each year.
There’s also more money going into live sports on CTV, with 49% of advertisers upping their budgets. Shoppable CTV ads are a new thing too. They let people buy products right from their TV shows, mixing shopping with entertainment.
CTV is making a big splash in the future of TV ads. With advertisers looking for clearer spending results and people watching more streaming shows, the mix of old and new ways is key. This digital marketing shift helps brands connect better with their viewers.
Walmart’s move to buy Vizio and Inscape shows how serious companies are about CTV. It could mean more control over ads and data for them in the CTV world.
The growing number of people watching CTV and the increasing money spent on CTV ads point to a big change. CTV is setting new trends in how we advertise and create content, changing the game for marketers and creators.
What Is CTV in Marketing?
Connected TV (CTV) is changing how we advertise, bringing new life to the scene. It’s key to know how CTV differs from OTT, and why it beats traditional TV ads.
Difference Between CTV and OTT
The battle of CTV vs. OTT is all about where content lands. CTV is for streaming on smart TVs, while OTT is for watching on all internet-connected devices. This distinction matters a lot for marketers planning their addressable TV advertising.
CTV is winning hearts because it promises targeted, efficient ad campaigns. Ads on CTV go right to TV screens. This makes the viewing experience much better than on OTT, where ads can show up on any device.
Advantages Over Traditional TV Advertising
Moving to CTV brings many perks over old-school TV ads. First off, precise targeting is a game-changer. Thanks to data, brands can tweak campaigns as they run, boosting impact and connection.
CTV is also great for getting results. Studies show people are more likely to respond to ads they see on CTV. With addressable TV advertising, ads can cater to specific groups, enhancing Return on Ad Spend (ROAS).
What’s more, CTV lets advertisers see clear results. Unlike traditional TV’s vague guesses, CTV provides detailed info on completion rates, website visits, and sales. This data confirms if campaigns are hitting their marks.
Lastly, CTV embraces programmatic buying, automating ad buys to place ads smartly and seamlessly. This way, brands can extend their reach and improve ROI effectively and efficiently.
Benefits of CTV Advertising
Connected TV (CTV) advertising has many unique advantages for your advertising strategy. It ensures precise and impactful ad delivery. Let’s look at the key benefits that make CTV targeting essential in modern advertising.
Precise Targeting
CTV advertising shines with its precise targeting abilities. Advertisers can target their audience based on demographics, interests, and how they use their devices. This allows you to show ads to the right people at the perfect moment. It boosts your marketing and ensures a better return on investment.
Local Targeting
CTV advertising also offers great local targeting. You can show hyper-localized ads, engaging viewers in specific areas. This makes your ads more relevant and likely to be watched to the end. People find local ads more related to their lives.
High Video Completion Rates
CTV’s engaging content and target precision often lead to high video completion rates. This is important for tracking how well ads keep viewers’ attention. It ensures your message gets through to your intended audience.
Detailed Measurement and Accurate Attribution
CTV advertising is known for detailed measures and accurate tracking. Unlike traditional TV, CTV gives real-time data on how viewers interact with ads and how well campaigns are doing. This information is crucial for improving campaigns and maximizing advertising benefits.
In-Flight Optimization
CTV advertising allows for in-flight optimization. You can monitor campaign performance live and adjust as needed. This flexibility lets you continuously improve your strategy, enhancing outcomes and solving any issues fast.
How Does CTV Advertising Work?
CTV advertising is vital for reaching your audience in a smart way. It combines traditional TV ads with the latest technology. This means your ads get shown to the right people when it matters most.
Ad Placement and Viewer Interaction
Ads in CTV are shown on devices like smart TVs and streaming gadgets. With most U.S. homes using video services and connected TVs, your ads can reach many people. It’s crucial to place ads well to grab viewers’ attention.
Proper ad placement can make viewers more involved. In fact, engagement with CTV ads is 17% higher than with regular TV ads.
Programmatic Advertising
Programmatic buying is key in CTV advertising. It uses data to place ads in real-time auctions. This method boosts both your reach and ROI.
By analyzing user data, you can target ads very precisely. Real-time bidding puts your ads in front of those most interested. This ups your chances of engaging viewers and making conversions.
CTV ad spending is climbing, expected to hit $40 billion by 2027. Understanding CTV ads and using programmatic methods is increasingly critical. This approach can dramatically improve your brand’s performance in the CTV arena.
How to Buy CTV Advertising
Buying ads on Connected TV, or CTV, is now vital for marketers. By 2023, it’s thought that 111 million US households will have CTV. This shows its wide reach and how well it can target audiences.
Choosing the Right Platform
Finding the best platform for your CTV ads is key to success. Major players include Hulu, Peacock, and YouTube. They have a large number of users. To choose well, you need to look at who watches each platform and their habits. Hulu is expected to lead in US ad spending on CTV with $3.84 billion in 2024.
Ad Types and Formats
It’s important to understand the types of CTV ads you can make. Advertisers can choose from:
- Video Ads: These are very popular and can keep viewers’ attention. For example, Yettel got a 94.52% view-through rate with a 17-second video ad.
- Display Ads: These ads are static or moving images that show on the edges of the screen. They work well with video ads for a fuller strategy.
- Interactive Ads: This type makes the most of CTV’s interactive features. Viewers can click on parts of the ad, making it a deeper experience.
Using these formats can make your ads more engaging and help you meet your campaign goals.
Setting Up Campaigns
Starting your CTV campaign is similar to online advertising. Even those new to CTV advertising will find it familiar. Begin with:
- Target Audience Definition: Define your audience precisely with the advanced targeting options available.
- Creative Development: Create engaging ads that fit the format and platform you’re using.
- Budget Allocation: Spread your budget carefully across platforms and ad formats for the best results.
- Tracking and Optimization: Measure your campaign’s performance closely. Adjust as needed to ensure success.
By picking the right platforms and types of ads, and following these steps, you can create effective CTV advertising campaigns.
CTV Advertising Strategies
Adding CTV ads to your marketing plan is key for wider reach and bigger impact. Around 88% of US homes now have at least one internet-connected TV. By linking your CTV ads with other digital strategies, you’ll spread a unified brand message everywhere.
Integrating with Other Digital Marketing Efforts
To really succeed, mix CTV with channels like social media, email, and search ads. This approach ensures your brand is seen by your target audience no matter where they are online. Use CTV’s targeting ability to combine your data with trusted external data for sharper aim.
Measuring Success and Adjusting Campaigns
Look at Video Completion Rate (VCR) and Cost Per Completed View (CPCV) to gauge your CTV ad success. These figures show how engaged and interested your audience is. Making changes based on analytics helps boost ad performance, ensuring you get more for what you spend.
Case Studies of Successful CTV Campaigns
Exploring CTV campaigns helps us see how they boost brand awareness and performance. By studying several CTV case studies, we learn about effective strategies. These strategies lead to impactful results.
Brand Awareness Success Stories
The National University education case study is a great example of focusing on brand awareness. They used CTV to boost their brand and reach new students. This led to more people engaging with their brand because of targeted ads. DocuSign also saw a 33% lift in ad recall. This shows the strength of targeting the right audience through CTV ads.
The Ruffles 2021 campaign is another key example. They found that spending more on CTV increased view rates, ad recall, and sales. This shows that smart CTV investments can strengthen brand connections.
L’Oreal USA also saw big benefits, with a 6 to 1 return on ad spend and a 6% sales lift from YouTube CTV ads. This highlights CTV ads’ role in boosting brand visibility and driving consumer actions.
Performance Marketing Wins
Pluralsight’s B2B case study shows performance marketing success. Their CTV campaign targeted decision-makers, improving lead generation and conversions. CTV’s focused reach was key in attracting the right audience.
Tuckernuck’s fashion case shows more success. They used CTV to increase online traffic and sales, with a 98.54% video completion rate. This shows the power of CTV and OTT campaigns.
Lincoln’s CTV campaign boosted familiarity by +14%, favorability by +13.5%, awareness by +5.5%, and purchase intent by +4.0%. These numbers prove CTV’s effectiveness in changing consumer behavior and boosting marketing.
These case studies show that the right mix of targeting, storytelling, and strategy can boost brand awareness and marketing performances. The success stories highlight CTV’s potential in the digital world.
Challenges and Limitations of CTV Advertising
CTV advertising has many benefits, but there are big hurdles like ad fraud and managing costs. As brands move their ad budgets to digital platforms, these challenges grow.
Ad Fraud and Viewability Issues
CTV advertising challenges heavily include ad fraud risks. Pixalate reports a 21% rate of global invalid traffic on devices like Roku and Amazon Fire TV in early 2023. This has led to a push for clear video ad metrics and fraud prevention. The Connected TV Standardization Initiative is working hard on these efforts.
Balancing Costs and ROI
Advertisers need to keep an eye on costs while aiming for solid returns. CTV ad spending is set to rise by 21.2% this year, hitting $25.09 billion. Innovative media planning tools are vital for effective CTV ad buying and targeting. This maximizes ads spending efficiency.
As more people cut the cord, advertisers are navigating a fast-changing landscape. According to Roku, half of U.S. homes will cut the cord by 2024. Good cost management is essential for leveraging the platform’s targeting capabilities and wide reach.
Future Trends in CTV Advertising
CTV advertising is full of potential, thanks to fast progress and changing trends. A study by GroupM says CTV ad revenue will increase by 13.8% in 2024, after going up 10.9% in the year before. This rise shows how important CTV is becoming in ads, helped by more smart TVs in homes. Smart TV use jumped from 11% in 2014 to 73% in 2023. As more people use streaming services, big changes and chances are coming.
Growth Projections
The future of CTV advertising looks like it will grow a lot. Reports say global CTV ad revenue will hit $29.6 billion in 2024, up from about $26 billion in 2022. This is a 14% rise. Retailers are also putting more money into CTV, with plans to spend $8.64 billion by 2027. On top of that, ad-supported streaming is expected to bring in $10 billion by 2027, drawing more ads.
Innovative Ad Formats
New ad tech is changing things fast, making way for unique ad types. Programmatic ads now make up 70% of CTV ad buys, moving towards automated, smart ads. Marketers are getting into interactive and shoppable CTV ads, which make buying easier and targeting sharper. This could mean more engaged viewers and ads that feel more personal.
At the same time, there’s more focus on privacy and keeping data safe. Working together to ensure user consent and data control is important in the digital world. Also, AI and machine learning are becoming more crucial. They help make finding shows easier and improve the user experience, helping shape the future of CTV advertising.
Looking forward, the future of CTV advertising has strong growth forecasts and new ad tech breakthroughs. This points to an industry that’s growing and changing in exciting ways.
Conclusion
Looking closely at CTV in marketing shows its big impact on future advertising plans. It combines traditional TV’s large-screen charm with digital ads’ accuracy. Now, 93% of U.S. internet users can be reached via CTV. This shows its huge potential as an advertising medium.
Many case studies prove CTV advertising works well. For example, Picsart saw a big increase in app installs and tripled their spending. Kikoff reduced their cost-per-engagement (CPE) by 27% and saw a 3X rise in installs. These successes show why CTV should be part of your digital marketing plans. This is especially true since 87% of viewers might try new Free Ad-supported Streaming TV (FAST) services in the next year.
The future of CTV advertising looks very bright. Spending on CTV ads is expected to hit 43.59 billion U.S. dollars by 2026. Also, Americans will likely spend more time on digital video than on traditional TV by 2024. Using CTV in your marketing lets you use advanced targeting, diverse ads, and data-driven insights. As digital marketing evolves, being ahead with CTV advertising is not just good—it’s necessary.