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Advertisers should be watching CTV

July 19, 2022 | By Rande Price, Research VP – DCN @Randeloo

As consumers find their way to connected TV (CTV) content, so do marketers. CTV and streaming products help media companies extend their content reach and tap into a strong-growing demand for content. To that end, we’re witnessing the rise of AVOD and FAST services, which broaden the reach of streaming beyond the premium content consumer. While consumers benefit from lower-cost alternatives, advertisers are keen to capitalize on a broader consumer base.

Attractive marketplace

Advertisers see a significant advantage in CTV as it combines the value of television engagement with the precision of digital buying and targeting. The ads are usually not skippable, appear in regular ad breaks, and are indistinguishable from cable television ads in production quality. 

eMarketer forecasts 204.1 million connected TV users, representing 60.1% of the population this year. They also project CTV ad revenues to increase 35% to $6.41 billion this year from upfront sales and to grow another 35% to $8.14 billion in 2023.

In fact, a new survey by Advertiser Perceptions and Premion reports that 66% of advertisers are shifting budgets from digital, social, and linear TV to fund CTV/OTT spend increases.

Quality, volume, and device

CTV streaming content is in the early stages of developing effective optimization for programmatic inventory. Peer39, an intelligence platform for contextual targeting and analytics, offers insight into CTV’s inventory quality. Their Programmatic CTV Benchmark report provides an additional level of transparency to better understand how CTV campaigns compare to the rest of the industry. 

The Q1 2022 report found that fake CTV content accounted for 4.43% of all ad calls. Fake content is content that doesn’t fit the scope of TV content. It’s likely to be screensaver channels, photo widgets, games, and mobile. Peer39 found the largest share of fake CTV content was among mobile apps pretending to be CTV streaming content in programmatic marketplaces. Approximately 2% to 18.5% of CTV inventory ran on fake content and about 13% of total impression volume per campaign ran on user-generated and non-professionally produced content. 

The programmatic CTV market is run primarily on three key devices, with Roku, Amazon Fire, and Samsung accounting for nine out of ten impressions. Not surprisingly, CTV is a medium for series and movies, and to a lesser extent, live tv for sports and news. 

Regarding the top OTT services by impression volume, Pluto TV stands above all, accounting for 59% of total impressions in open programmatic auctions. Hulu, Sling, and Viacom’s EyeQ only account for 2% of impressions, each.

Effective ad market

According to ExchangeWire, CTV streaming advertising is proving to be more effective than traditional TV advertising, as CTV viewers are 42% more likely to buy advertised products because of the ads viewed. Importantly, content players have insight into what viewers watch, when, and how often. Extracting data in a privacy-compliant manner is essential for profiling and targeting a valuable CTV audience.

The combination of digital reach and television content makes CTV streaming ad inventory especially valuable to marketers looking to reach broad audiences. It allows media companies to attract younger audiences of cord-cutters and “cord-never” consumers, the early adopters of CTV platforms. It presents an additional advertising route for media organizations and uses their first-party data and contextual insight to reinforce the value of video monetization. 

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