In the dim light of modern living rooms, a battle is being waged: the evolution of television consumption. From black-and-white family gatherers to colorized rectangles of entertainment, TVs have long been the center of home recreation. Today, the rise of Connected TV (CTV) marks a significant shift in how we view and interact with content. As Millennials, Gen X, Y, and even Gen Z make their mark, they’re tuning into CTV like never before.
How We Got Here: The Rapid Rise of CTV
CTV has established itself as a major force in the 21st century. Its sudden rise in popularity isn’t merely because of its novelty or the allure of modernity. It lies in its unparalleled user engagement and lucrative accessibility for advertisers.
Traditional linear TV, once the unchallenged behemoth of the ad world, now seems like an old, fading star next to CTV’s dazzling 82% attention rate. This riveting new platform is absorbing users’ attention for three seconds longer on average, pulling them deeper into its embrace.
The Catalyst: AVOD’s Magnetic Pull
The swelling tide of CTV owes a significant debt to Ad-Supported Video On Demand (AVOD). Media companies and broadcasters, while still committed to crafting riveting content, have found a golden goose in interspersing brand advertisements. This ad infusion allows these platforms to cut down subscription costs, making viewers all the more amenable to a few commercials if it means free content.
By 2026, a staggering 174 million AVOD enthusiasts will emerge, with 68.6% basking in the offerings of OTT services. With audiences scattering and splintering across numerous platforms, advertisers have a challenge and an opportunity: to cast a wide net, pulling in diverse, niche audience segments apt for tailored campaigns.
Navigating a Cookieless Landscape
The impending demise of third-party cookies looms large on the digital horizon, setting the stage for OTT and CTV platforms to evolve robustly. As this cookieless future becomes our reality, marketers are amplifying their focus, keenly watching every dollar in their arsenal, ensuring they weaponize their campaigns for optimal results.
Amidst these seismic shifts, the evolution of CTV and OTT heralds a lush vista for marketers. Flexibility is the name of the game, with the ability to scale budgets up or down, taking inspiration from audience purchasing behaviors.
Traditional TV: The Diminishing Giant
Traditional, linear TV, which for decades enjoyed an unbroken reign, now confronts an existential dilemma. With only 56 million U.S households tuning in daily in 2022’s latter half, its influence is waning. The world is changing, and if brands hope to survive, they must change with it.
In light of this, the compelling question for advertisers is stark: If the vast majority of linear ads can’t access half of U.S households, how do they bridge this expansive gap? CTV beckons as the answer, urging retailers to integrate it into their holistic video strategies.
The Impending Recession and Its Implications
The winds of economic unpredictability blow cold, and as per Ned Davis Research, a global recession isn’t a distant possibility but an impending reality. Yet, history has shown that even in these turbulent waters, brands that navigate with courage, amplifying ad spend during economic downturns, often reap long-term rewards. Analytics Partners highlights that 60% of brands that bolstered their media investments during the last recession witnessed an ROI uptick.
Deciphering the CTV Conundrum: A Marketer’s Perspective
2023 presents a nuanced tapestry for marketers. Balancing the growing allure of CTV advertising against the backdrop of economic uncertainty is no mean feat. The very fabric of viewership is morphing, presenting challenges aplenty but also opportunities.
CTV offers an arsenal of benefits — it’s precise in targeting, measurable in its impact, and can be fine-tuned for specific metrics. With 23% of CTV viewers making purchases post-ad exposure, it’s evident: CTV is not just a platform; it’s a sales catalyst.
Moreover, its cost-effectiveness offers brands an escape from the often exorbitant world of traditional TV advertising. The return on investment, both in terms of brand awareness and engagement, seems to tip heavily in favor of CTV.
The Future Beckons
The dynamism of CTV advertising mandates advertisers to be agile, constantly adapting to the latest trends. The data supports the momentum: CTV ad spend is projected to skyrocket to $26 billion in 2023, with OTT video ad expenditure not far behind, expected to touch nearly $10 billion.
Traditional TV, long an unchallenged monarch of the advertising realm, now faces a formidable challenger in CTV. The metrics support the narrative, with CTV providing performance-based metrics spanning from initial awareness to ultimate conversions.
Programmatic capabilities, with their automated real-time bidding processes, promise to play a pivotal role in strategic media plans. These capabilities promise omnichannel marketing strategies, cross-device targeting, and much more.
