Cord-cutters are having a transformative effect on the entire video advertising ecosystem. As viewers enthusiastically embrace connected television (CTV) advertisers are following suit. They have accelerated their CTV investments in order to engage consumers at every digital touchpoint in a video everywhere world.
In addition, the impact of CTV growth is reverberating across destinations and devices, with premium publishers benefiting from its growth, and mobile moving into second place in terms of percentage of overall impressions by device. These are some of the biggest takeaways from our Q4 and Full-year 2018 Video Benchmark Report from Extreme Reach, which provides a cloud-based creative asset management platform, AdBridgeTM, tailored to the needs of the ad industry.
Based on the latest aggregate performance data from ER’s proprietary video ad server, the latest benchmarks report reveals emerging ad performance trends as indicated by such metrics as viewer click-through, video ad completion and viewability rates, as well as invalid traffic and time spent.
The report also provides breakdowns related to these numbers based on media destination (i.e., premium publisher vs. media aggregator) and device (i.e., desktop, mobile, tablet and connected television [CTV]). Here’s what we found in 2018 that’s likely to gain force in the years ahead.
CTV Overtakes Mobile as Video Advertising’s Growth Engine
According to market research firm eMarketer, CTV use has soared to about 190 million users as consumers seek out new or additional ways to view TV content on their terms and timelines. That means more than half (57%) of the population has migrated from linear TV to devices like Roku and Apple TV, as well as ad-supported streaming services. Advertiser uptake has not been as robust as that of consumers. eMarketer says CTV represents only a small piece of overall digital ad spending today. However, the spend is enough to shake up the share of impressions being earned across devices and destinations.
For example, mobile dominated video ad impressions in 2017, peaking with a 39% share in Q4 vs CTV’s 16%. But in a year’s time, that number had grown to 44% of impressions. That represents a stunning 193% increase.
On the other side of the coin, the share of impressions served to desktops and tablets has continued to shrink every quarter since Q1 2016. More specifically, we saw declines from Q4 2017 to Q4 2018 of 36% and 54%, respectively, for desktop and tablets.
CTV Impacts Multiple Metrics for Premium Publishers
As viewers gravitate to CTV, premium publishers are moving there too. In Q4 2018, more than half the impressions served by Extreme Reach to premium publishers ran on CTV platforms, an increase of 154% from the 21% that ran on CTV in Q4 2017. CTV is having a halo effect on other metrics important to advertisers including ad length, levels of invalid traffic and video completion rates on premium sites.
Regarding ad length, 6-second ads seemed to be positioned to be the next wave, given their performance in the first two quarters of 2018 and all the media coverage they earned at that time. But the declines in mobile and desktop consumption drove a 78% decrease in impressions for 6-second spots from Q4 2017 to Q4 2018. Instead, as first noted in Q3, the rise in CTV seems to be causing a resurgence of longer ads, with 30-second spots increasing their proportion of impressions and more than doubling from Q4 2017 (28%) to Q4 2018 (58%). However, 15-second spots, which held the majority of impressions throughout 2017, declined by 43% from Q4 2017 to Q4 2018.
It’s not surprising then that with 30-second ads taking the lion’s share of impressions last year, the average time spent with video ads increased by 35.3%, from a low of 17-seconds in Q4 2017 to 23-seconds in Q4 2018.
For advertisers, directly-bought CTV remains relatively insulated from non-human traffic. This provides marketers with the brand-safe environment they are increasingly demanding. Video completion rates are also very high on CTV, likely a reflection of the level of commitment consumers bring to content on the channel, as well as the inability to skip the ads.
While video completion rates are up for all devices, CTV is the winner in the category with 95% of ads playing all the way through. Premium vendors, who charge premium prices, are investing in CTV and providing the performance advertisers expect.
Win-Win for Advertisers and Audiences
So what do the 2018 metrics mean for the future? Given how quickly and dramatically video advertising has moved from a mobile to a CTV focus it’s difficult to predict how much more change CTV will bring in the year ahead. But with audiences so focused on CTV, it’s reasonable to assume that more major media companies will enter the CTV market via new launches, partnerships and acquisitions, making the market even more competitive. But overall, these developments seem to bode well for both viewers and advertisers alike.
Visit Extreme Reach’s interactive video benchmarks report to review complete findings for Q4 and the full year.