Throughout recent years, we could observe a shift in the consumption of video content towards on-demand, which includes content that viewers can watch on connected TV (CTV). This can be a Smart TV, game console or other device connected to the Internet which allows users to make their own choices considering the content they watch. It is estimated that by 2020, the users will spend half of all video-consumption time on content that they choose themselves. Although linear TV will continue to occupy a significant part of consumers’ lifetime, the tendency to reduce the time spent on watching broadcast TV becomes clear. One should also note that younger people tend to choose video-on-demand more often.

Сurrent ad streaming landscape

Although some advertisers are still unaware of the potential benefits of CTV, its tendency to grow becomes more and more striking. According to Emarketer, CTV media spending is estimated to reach $6.94 billion in the U.S by 2019, and by 2023 this number will grow to $14.1 billion. Moreover, by the end of 2019 CTV is expected to gain 195.1 million viewers and by 2020 there will be over 200 million users who choose this type of media.

Among the most popular streaming devices, Roku takes the first place with around 44% of viewers. It is then followed by Amazon Fire TV with 33%.

ctv-prediction-america

Google Chromecast and Apple TV close this list with 13% and 10% of viewers respectively. As for over-the-top(OTT) video services an absolute leader is YouTube with 198 million U.S. viewers. Hulu reached 75.8 million, and Netflix gets very close with 60.6 million viewers. Finally, 7 million viewers have chosen Sling TV.

Benefits for publishers and advertisers

Okay, so connected TV is growing, but how could it possibly change the world of programmatic advertising powered by real-time bidding? And what’s in it for advertisers and publishers?

Well, first of all, since users usually watch TV at home, the advertising provided by CTV gets seen by more than one person. This is an extremely beneficial opportunity and it is only provided by CTV, but it is not the end of list. According to a recent study by Magna and Roku, OTT platforms showed 67% better effectiveness at driving purchase intent compared to ads broadcasted on linear television. Moreover, the same study showed that these platforms needless exposure to generate the impact compared to linear TV. Those numbers alone are already compelling, but let us now have a look at certain benefits of CTV for publishers and advertisers.

Benefits for advertisers:

Benefits for publishers:

Content customization.

CTV is a unique platform in terms of creative customization and opportunities to experiment. Marketers can use different formats and animations, interactive videos which can significantly increase brand awareness as well as users’ involvement.

Moreover, connected TV provides an opportunity to deliver ads of extremely high quality with stereo sound and HD resolution for video. This is enormous field for creativity and it also engages the viewers much more effectively than any other type of advertising.

Safe environment.

Since CTV advertising formats are quite specific, the probability of fraud is much lower from both sides. CTV provides high-quality traffic as more users are engaged in this type of advertising and it also ensures a higher quality of content and ads provided by the marketers. Those factors make CTV one of the safest environments for digital advertising formats which helps to build trust between publishers and advertisers.

Unexplored audience

If we compare CTV to other platforms, it is clear that it is highly beneficial for advertisers. Once they pay for one ad, there is a huge probability that this ad would be seen by far more people than just one, so their message would reach a wider public.

Furthermore, several studies confirm that millennials are especially concentrated among CTV audiences. Many of them haven’t been using the traditional TV for years. As one of the youngest and mobile groups of people, they are a very valuable audience for many advertisers.

Control over display

Advertising on connected TV gives much more power to the publishers in terms of users’ contact with ads. It provides huge means to target users by different factors such as demographics, location or level of income, so the message reaches the target audience on TV.

Apart from this, interaction of users with CTV format can be also controlled on programmatic platforms. In such a case using a single dashboard the publisher can pre-define what ad formats will be shown to the users, as well as their resolution, and other important details.

Customer loyalty and engagement

The CTV viewing experience is very similar to one of traditional television, so people are used to it and are more willing to accept this type of ads. Studies show that most viewers tend to sit through video ads on connected TV, especially if it is a mid-roll ad, in order to continue watching the show. In addition, many viewers report that ads shown on CTV seem to be less annoying than those broadcasted on linear TV. So, in general, the attitude towards CTV advertising is usually positive as most users are used to them and understand that it ensures high-quality content.

How to make most out of CTV in 2020

So we can see that CTV will become one of the fastest developing areas for advertising, it will also bring unique benefits for both advertisers and publishers. As expected, CTV advertising will reach its full potential by 2020, so isn’t it just the right time to jump in! SmartyAds media-buying solutions, always provide an opportunity to be at the forefront of marketing trends with innovative and dynamic formats like Connected TV. With our updated DSP you can now launch a campaign on any Internet-powered Smart TV device. This innovative feature allows you to reach customers through multiple СTV environments and provide unique targeted impressions. With just 3 steps you can start advertising to reach any location: sign up on the DSP, create a campaign, and manage it in real-time.

Join our new DSP and make the most out of CTV today!

Written by
Iryna Sieliutina, Head of Content Strategy of SmartyAds
December 2019