Interviews, insight & analysis on digital media & marketing

Debunking the myths of CTV

By Mia Sari, Senior Manager, Solutions Consulting, Xandr

Since the start of Covid-19 in 2020, we have seen an accelerated shift in digital video. With consumers spending more time indoors than ever before, they turned to TV and on-demand streaming video services for news and entertainment – meaning Connected TV (CTV) grew in popularity. In fact, across the big five markets in Europe, 50% of all internet-enabled and TV households can be reached via CTV, representing 61.5 million households. 

As a programmatic trader, it is an exciting time to see the accelerated growth of CTV campaigns. Like AI and Blockchain, CTV has been a buzzword in the industry for a long time and driven by the pandemic, we are now seeing the benefits. 

However, there are still many unknowns in the CTV space. Let’s decipher fact from fiction and take a look at some of the common misconceptions around Connected TV.

Can CTV be measured?

The common misconception that CTV is not measurable may derive from the fact that CTV requires different technology compared to mobile and desktop advertising. 

As CTV is a relatively new platform, there is still work to be done to standardise the inventory in the market. CTV metric measurement is undeniably more limited than regular video advertising and implementing a performance-based KPI on CTV campaigns can be tricky. However, with the latest development in measurement intelligence, we can start to measure conversion lift and offline sales attribution from CTV activities.

The beauty of CTV campaigns in comparison to linear TV advertising is the amount of data available. Paying attention to metrics like unique reach, completion rates (VCR), or cost per completed views (CPCV) gives an important advantage as we can measure the efficiency of CTV campaigns through engagement or incremental lift. 

Additionally, it does not hurt to use the TV metric, Gross Rating Points (GRPs,) which can measure the size of an audience reached through CTV campaigns.

Consumers don’t like to watch adverts

Today CTV viewers don’t mind getting advertising as long as they can view free content. Watching ads   has become a natural part of daily viewing habits for many. Based on Xandr’s 2020 Relevance Report, 82% of consumers prefer free content, even if it means viewing ads and 70% have accepted ads as part of their media experience.

In fact, when Hulu provided the option of an ad-supported plan on their platform, a lot of people jumped on the bandwagon. Hulu says 70% of its 82 million viewers are on ad-supported plans.

And this is only the start. According to Comscore, growth in reach of ad-supported services is outpacing that of non-ad-supported services presenting a need and opportunity for advertising. Ad-supported services grew nine percent in 2021. Non-ad-supported services grew only five percent – the tide is turning and consumers are looking for alternative streaming options.

Is there low CTV supply in programmatic?

In reality, CTV inventory grows bigger than ever in the programmatic channel. 

Relying on linear TV alone is a missed opportunity for advertisers if they want to reach audiences at scale. Comscore reports that 21% of CTV viewing households are cord cutters (households who cut the cord within the past five years) and 21% are cord nevers (households with no cable/satellite subscription in the past five years). In other words, incorporating a CTV strategy into your media mix is important for advertisers in order to scale their campaigns. 

Almost all the top tier network broadcasts are available programmatically with ad-supported options, and premium network inventory is becoming increasingly available in the programmatic space as we see linear tv providers launch their own CTV advertising-based video.

On top of that, CTV publishers or curators that boost their own distribution platforms, coupled with audience authentication requirements, are also able to gather a large array of identity signals from viewers; they can then combine this information with their CTV inventory.

Using this, advertisers can then target more effectively to reach the right audience in the right context, including household profiles, locations, time of day, context of content being consumed and even a particular moment in the buying cycle.

CTV ads are less effective than regular video advertising

On the contrary, a research reveals that CTV ads are equally as effective as ads on video-sharing platforms in attracting viewer attention and are often more impactful than traditional TV ads. According to viewers, the most effective CTV ads are those with feel-good content, good music, interesting stories and that maintain brand relevance.

As CTV grows in measurement and targeting capabilities, advertisers can also scan the content of a video to identify sentiments and category of the placement. This way they can match their ad content with the programme accordingly. As a result, it could increase the effectiveness of their CTV campaigns by utilising contextual intelligence and bespoke advertising to reach audiences. 

Watch this space

With a massive 1.1billion Connected TV devices in use around the world, and with CTV ad spend expected to reach $194 billion by 2025, it’s evident that the future of video advertising lies with Connected TV.

It provides a huge opportunity for advertisers to reach engaged audiences with the right message wherever they may be. People have changed the way in which they consume big-screen content, and with that, advertising is also adapting to keep pace, opening up a world of new opportunities for advertisers.

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