Interviews, insight & analysis on digital media & marketing

Looking at the bigger picture: What marketers need to know about CTV in 2022

By Matt Keating, Sales Director – UK, VDX.tv

Connected TV (CTV), i.e. the biggest internet-enabled screen in the household, capable of streaming video content – continues to attract huge interest from marketers and advertisers, thanks to its combination of incremental reach with digital measurement capabilities. With approximately 80% of UK households now having access to a ‘smart TV’, CTV may just be one of the biggest opportunities for marketers to engage their audiences in 2022 and beyond.

Although CTV offers consumers the same lean-in, video experience as linear television, it provides brands with targeting abilities that are more in line with digital advertising. More precise targeting and greater measurement capabilities means more relevant ad experiences for consumers.

In order to leverage the true power of CTV, marketers need to understand the bigger picture – how CTV supports today’s consumer behaviors and expectations (especially in a post-pandemic world) and how CTV and advertising-based video-on-demand (AVOD) can fit into a wider advertising strategy.

The pandemic’s effect on CTV viewership

CTV viewership was already on the rise pre-COVID, but the pandemic has only served to accelerate content consumption on CTV devices. Samsung Ads’ reported a 59% increase in CTV viewership between January 2020 and 2021, while a global study conducted by DoubleVerify found that consumers were averaging 6 hours and 59 minutes daily on their CTV devices (up from 3 hours and 17 minutes, pre-pandemic.) Consumers are certainly comfortable watching streamed content across multiple platforms, with subscription stacking becoming increasingly normal in the UK – 65.3% of UK households subscribe to two or more subscription video-on-demand (SVOD) services. But at what point will audiences hit subscription fatigue, unwilling to pay for yet another service in exchange for more content options?

VDX.tv’s Key Takeaway – CTV viewership was accelerated by the pandemic, but it’s here’s to stay for the foreseeable future and marketers should take note.

As subscriptions plateau, AVOD steps up

Among the proliferation of streaming platforms, many requiring paid subscriptions, AVOD services have started to become a more attractive option for consumers. In fact, AVOD usage saw a significant increase from February 2020 to February 2021, with 58% of consumers using AVOD services in February of this year, up from 34% in February 2020.

While some SVOD platforms, such as Netflix, do not serve up ads to viewers, others have started to buck the trend. The Amazon-owned IMDb TV channel – launched in January 2019 – has recently started supporting ads. In February of 2021, Amazon Advertising claimed to have nearly tripled its ad-supported streaming audience from the previous year. With Amazon Prime Video possessing 31% device penetration, this means there has been an increase in the number of consumers seeing ads.

One challenge that marketers should note for AVOD is the generational divide. Linear viewership of adults 65+ increased by 13% between January 2020-2021. Older households continue to remain faithful to traditional channels, a trend which shows little sign of changing.

No doubt, the rise of AVOD is proving to be a challenge to the status quo. Broadcaster video-on-demand (BVOD) from the ‘traditional’ broadcasters previously shared dual dominance alongside SVOD – but 2022 will see all three vie for the attention of consumers. In order to ensure that audiences are captivated, advertisers need to think about how AVOD on CTV devices can play a role in their wider advertising strategies. For example, broadcasters are starting to invest in CTV. Pluto TV has sought to capitalize on out-of-home (OOH) potential, employing a more cross-channel approach to maximize reach across devices.

VDX.tv’s Key Takeaway – The growth of AVOD means that brands need to seriously consider how it can play a central role in their wider advertising strategies. Brands also need to think about the gaps that require bridging; older audiences are not yet at a point where they are ready to give up linear television. The flip-side to that of course is that, for targeting younger demographics, CTV certainly can’t be considered optional much longer! 

The importance of CTV being ‘connected’

CTV’s continued upward trajectory lends itself well to the household targeting model, which can deliver advertising to all connected devices within a household, thus extending a brand’s messaging beyond the TV experience. This also offers advertisers access to increased amounts of personalised data, which can be incorporated into future campaigns.

There are many parallels that can be drawn between CTV’s journey, and that of mobile. Originally viewed as a ‘bolt-on’, mobile’s potential quickly became apparent. Eventually, it became an integral cog in a comprehensive marketing strategy. The same can be said for CTV – with some believing that it reached the end point in a shorter timeframe.

It is vital that advertisers look to de-silo CTV at the earliest convenience. This can allow marketing processes to be streamlined. It will also ensure that audience insights can be leveraged in a timely fashion, and subsequently used to inform and shape advertising methods.

There is an air of uniqueness surrounding CTV. Traditional advertisers that have previously used linear television have started to divert their finances towards CTV. Small and midsize businesses (SMBs) are also taking this chance to experiment with broadening their marketing techniques. Although the results will vary, the continued influx of consumers means that CTV is too important to avoid in 2022.

VDX.tv’s Key Takeaway – CTV can be used to improve thecustomer experience (CX) by delivering a more cohesive brand advertising across device, whilst simultaneously benefitting marketers.  Over the next year, agencies that are slow to change will find it difficult to keep up with the evolving market.

Don’t change the channel in 2022

With engagement opportunities continuing to rise, there has never been a better time for brands to forge connections with consumers through their televisions. Forecasts suggest that total CTV ad spend for 2021 will have risen by 59.9% from last year. The data that CTV gathers can be used to create more personalised advertising campaigns that cut through the vast amount of undifferentiated messaging.

The primary task for marketers must focus on drawing consumers down the sales funnel. This is where interactivity is friend – not foe. Additional content that users are able to opt into offers CTV advertisers the chance to connect with multiple household stakeholders at the same time. In 2022, CTV may just be one of the most exciting opportunities waiting to be explored. Are you ready to dive in?