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Published on December 27, 2023
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As we welcome 2024, we’d like to take a moment to reflect on the impact Connected TV (CTV) and CTV advertising have made in 2023. Like one of our popular streaming audio inventory partners, Spotify, EMG will summarize and highlight the major shifts, trends, and marketing opinions on CTV and streaming advertising last year. Time to unwrap!
By the end of 2023,
Here are the hottest trends and statistics for CTV and CTV advertising right now. Let’s dive in.
Connected TV advertising combines the performance power of traditional TV advertising with the programmatic technology of the digital age. Viewers are cutting the cord (dropping cable TV) and converting to Connected TV at lightning rates.
According to a study by The Trade Desk, an overwhelming 87% of marketers perceive connected TV (CTV) advertising to be as effective as, if not more effective than, traditional TV advertising. Despite this clear success in CTV advertising and a growing, exclusive audience on this medium, CTV advertising spend is still considered underfunded, with advertisers lagging behind current TV viewership habits. However, marketers are starting to align with consumer attention.
So, why is CTV superior to other advertising mediums?
CTV is the marriage of linear TV and digital marketing, seamlessly blending the strengths of both channels into a potent advertising medium. CTV is able to function much like a digital ad channel, combining the impactful storytelling capabilities of television with precise audience targeting, advanced measurement and reporting, and insightful analytics.
In a report by veteran Wall Street media analyst Dan Salmon of BMO Capital, he identifies four pivotal factors driving the growth of CTV advertising in comparison to its traditional TV predecessor:
Advertisers are seeing a substantial performance jump on Connected TV, as opposed to mobile. CTV is the dominant screen, holding 71% share of total video ad viewing, according to a FreeWheel study. CTV viewership share jumped more than 10% compared to 2021’s viewership report, while mobile platforms hold only 11% share. Additionally, CTV’s video completion rates outperform mobile, ranging from 96-98% completion for the past three years.
Video advertising on smaller screens underperforms. Why? Individuals prefer the “leaned back,” “living room” viewing experience on the big screen. This immersive, focused watching experience helps CTV advertising drive the highest engagement and performance for streaming ad campaigns.
Not only is it the top performing video advertising platform, but a noteworthy 46% of adults express a preference for television advertising, considering it to be the most trustworthy advertising channel, in contrast to social media’s 19%.
Although still relatively new to the scene, marketers are already seeing the benefits of CTV over the limited capabilities of linear TV advertising. Here are some noteworthy benefits expected from surveyed marketers:
CTV has a “halo effect” on other advertising channels, creating a positive effect on the performance of additional channels like social media and paid search ads. CTV easily integrates with other channels in an advertiser’s strategy, reaching new audiences on a highly-engaging big screen.
Digiday and Innovid report that a majority of marketers are incorporating CTV ads into their overall marketing mix, teaming up with traditional media channels like social media (86%), display advertising (78%), mobile video (77%), desktop video (67%), and linear TV (54%). Adding the preferred (and top performing) screen for video consumption to a marketing strategy perfectly complements other forms of advertising, creating an optimal range of exposures and boosting overall performance.
The Innovid and Digiday study dove into the primary key performance indicators (KPIs) that are most important for CTV marketers, namely conversions, revenue, reach, and brand awareness.
When asked about CTV advertising’s impact on their businesses, surveyed advertisers highlighted the following outcomes:
With greater technological power on CTV comes greater responsibility. Many marketers stress about properly curating their audiences, inventories, and attribution models — things they didn’t have to worry about with linear TV advertising’s limited capabilities. While these new advancements are extremely powerful performance drivers, knowing how to use them is massively important for actual success.
As more choices enter the CTV market, inventory fragmentation is a growing concern for many marketers. From new operating systems, streaming applications, networks, bundles, and ad-supported services, the landscape of CTV is expected to become increasingly fragmented, so advertising on all ad-supported inventories is getting harder. This means advertisers need to proactively acquire contracts with inventory publishers to unlock all available inventories, plus be diligent about their inventory auditing to ensure their chosen inventory is properly performing and reaching the right audiences.
Marketers identified additional challenges with the integration of CTV advertising, including:
This is a lot to worry about, and many marketers who are already managing other advertising mediums choose to consult streaming advertising experts to see the greatest (and easiest) success.
As you can see, marketers have a lot of new responsibilities with the technological capabilities of Connected TV, from audience configuration, inventory contracts, to internal auditing and optimizing, just to name a few. Marketers are aware of the challenges associated with transitioning to CTV and are increasingly looking for CTV expertise.
As a “do it yourself” effort, marketing teams are urged to invest in technology that facilitates the creation of a seamless omnichannel strategy. This involves efficient distribution, customization, and measurement of ads across all screens and devices.
Success in this evolving landscape, where TV content increasingly shifts online and away from traditional cable setups, requires advertisers to learn and equip themselves with these technological tools or hire streaming advertising specialists.
To combat this learning curve, the surveyed marketers (via Innovid and Digiday) have taken various steps:
Although this statement has always been true, today’s uncertain economy has caused many marketers more worry regarding the cost-efficiency of their marketing dollars.
Luckily for advertisers, there’s no minimum budget requirement for CTV advertising. Unlike traditional TV advertising, which requires substantial upfront budgets—averaging around $104,700 for an untargeted 30-second commercial on a national network—Connected TV (CTV) offers brands and marketers greater flexibility, simplicity, and accessibility.
However, it’s important to note that allocating a mere $20 to CTV advertising won’t move the market. Advertisers should carefully assess their target audience, sales penetration, market size, brand index, and desired marketing goals when determining a campaign’s budget.
A targeted campaign within a distinct and specific niche can be successful with a budget of just a few thousand dollars. Six figure budgets are no longer the minimum.
With our CTV Wrapped for 2023 complete, it’s time to look at 2024. Here’s EMG with the 2024 streaming forecast: predicting clear skies ahead for Connected TV and CTV advertising.
Believe it or not, we are officially in the mid 2020s. The early 20s have been a period of great growth and change in the world of streaming, seeing new popularity and recognition from viewers and marketers alike. Here are some of the major shifts that the video advertising landscape is expected to see in 2024 via Insider Intelligence market analyst Ross Benes, and why marketers should care.
Linear TV viewership will continue to fall, more streaming apps will enter the market, ad pricing and revenue will narrow, higher fees and more ad-supported services will emerge, and Amazon will make a big splash. CTV changes every year for the better, and 2024 will be no exception. Advertisers will see increasing value and opportunity in CTV advertising as this exclusive audience grows, prices narrow, and inventory becomes more plentiful. By following viewership preferences (toward CTV), advertisers will see the greatest campaign success.
To join the fun (and success), launch a CTV campaign today with total support from EMG.
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