By Austin Scott, Head of Video Market Development, EMEA at Xandr
Over the course of the pandemic, the connected TV (CTV) space has experienced accelerated growth, with viewers around the world flocking to video-on-demand (VOD) to keep them entertained.
Subscription video-on-demand (SVOD) services, including Netflix, Disney+,and , Now TV, have boomed alongside ad-based video-on-demand (AVOD) platforms like Roku, Fox’s Tubi, NBCUniversal’s Peacock, FandangoNOW, and Amazon’s IMDB TV.
This ever-increasing consumption is set to see global users of over-the-top (OTT) TV rise to 2.9 billion by 2025 – having sat at 1.8 billion in 2017. And the majority of this growth is expected to be in AVOD platforms, with consumers embracing free alternatives to the paid SVOD platforms on the market.
With 57% of UK households already owning smart TVs, the time for brands to capitalise on the market is now, especially with consumer focus predicted to be on AVOD platforms.
Despite this, advertisers have been seemingly reluctant to shift budgets toward CTV, with many citing a number of barriers as preventing them from investing more heavily in digital video. Xandr’s research has found that 57% of UK digital video advertisers and buyers face a lack of supply, 41% have a lack of understanding of the ecosystem, and 35% believe there isn’t enough availability and quality of data within digital video.
At the same time, 50% of these advertisers do not feel they are effectively reaching the right audiences with their video advertising campaigns and 52% are not effectively optimising their campaigns.
So, how can brands capitalise on this opportunity and ensure they realise the full potential of CTV?
Big business at the micro level
Acquiring knowledge about CTV and finding ways to overcome the other barriers is definitely in the best interest of any brand. Those who step out of their comfort zones and embrace CTV will remain competitive.
To overcome these challenges, it’s important for brands to seek out CTV partners which can solve all of the issues around supply, and availability and quality of data.
CTV is a way to reach incremental audiences, or complement and be a key part of an omnichannel strategy. The lower barrier to entry also makes way for smaller brands to access this premium content. The cost of creating the ad is still a consideration but there are more and more creative agencies and freelance options for putting together a high impact ad. CTV provides the ability to deliver affordable, smaller, more targeted campaigns on the big screen than linear TV, where high campaign minimum spends are usually required. Digital connected television opens up new opportunities for smaller brands previously shut out from big screen advertising due to budget limitations.
CTV has real-time data, which can be used to target consumers at local, household, or device-level, so it’s important for advertisers to look to work with audience authentication providers and media owners that enable them to target at this level. Brands can also identify when and where to reach their desired audience by using their own first-party data from CRM and transaction records, online data such as website visits and available digital segments indicating, for example, occupation type.
Making use of this first-party data is going to be incredibly important with the loss of third-party cookies. As such, brands need to think about weaving their first-party data into their buying of audiences and work with media agencies, enabling advertisers to value audiences and follow-up with engaging creative.
As buying is executed using ad trading software rather than manual insertion orders, CTV offers buyers and sellers improved efficiency and spend agility while offering the ability to support buying against known performance outcomes.
Moving forward, capitalising on CTV’s growth will be paramount to reaching audiences and making every interaction count. When CTV is at scale, the ability to do things like A/B testing of creatives on the fly, designing tailored messages and leveraging a curated deals library with real-time information powered by a standardised content taxonomy will be transformational.
Consumer adoption of CTV is only going up and brands not involved in the space will be behind on reaching key audiences. It is a cost-efficient opportunity to target people at micro levels making it a great solution, for big and small brands alike to achieve relevancy. This all calls for a better understanding of data and granular forecasting as the way to optimise audience experiences and maximise returns.
*Xandr is a client of Bluestripe Communications, owned by Bluestripe Group, the owner of NDA