By Jay Bemis | Advertising Systems Inc.
Not only does connected TV continue to link itself to more and more viewers, it’s continuing to click as an attractive opportunity for advertisers as well.
By the end of this year, advertisers in the United States will spend $25 billion on connected TV (CTV) ads — an amount that will grow to $29.2 billion in 2024 and $40.9 billion by the end of 2027, according to a recent forecast from the experts at eMarketer.
Spending on linear or traditional TV advertising, meanwhile, will decrease during that same period, from $61 billion this year to $56.8 billion by the end of 2027, the experts said.
“The glory days of linear TV advertising are gone, but TV advertising isn’t going away as much as it’s shifting from traditional pay TV services (cable, satellite, and telecom) to internet-delivered connected TV (CTV) programming,” eMarketer said.
What Is Connected TV, and What Makes CTV Ads Attractive?
Connected TV or CTV is a term that refers to devices that can connect to the internet and stream video content. It includes such devices as smart TVs, gaming consoles and set-top boxes, such as Roku. Traditional or linear TV, meanwhile, includes broadcast TV and cable TV, including satellite providers.
Through video marketing, brands can reach the large and growing audience of cord-cutters and “cord-nevers” who are opting out of traditional cable or satellite TV by delivering ads that are specifically designed for CTV viewers.
Brands particularly like these strengths that CTV video ads can deliver:
- They add more targeting and measurement capabilities than linear TV provides.
With CTV ads, brands can use data from various sources, such as device IDs, IP addresses, geolocation and online behavior, to segment and personalize their ads based on viewers’ interests, preferences, demographics and purchase intent.
- They offer a higher-quality and more immersive viewing experience for consumers.
CTV ads are typically shown alongside premium content, such as TV shows, movies, news and live sports. They also are viewed as less intrusive and more engaging than linear TV ads, because they can include such interactive features as calls to action, coupons or quizzes.
Brands Buying CTV Ads the Programmatic Way
One trend shaping the future of CTV ads is programmatic ad spending, which is the automated buying and selling of digital ad inventory using software and algorithms. Programmatic ad spending allows advertisers to access more inventory across multiple platforms and devices — as well as leverage data and artificial intelligence to optimize their campaigns in real time.
Programmatic ad spending on CTV in the US reached $6.73 billion in 2022, accounting for 54.8% of total CTV ad spending, according to eMarketer. That share is expected to increase to 66.8% by 2024.
With the help of a marketing expert, brands will find that programmatic ad spending on CTV offers several benefits, including:
- Increased efficiency and scalability. Programmatic ad spending on CTV eliminates the need for manual negotiations and contracts with publishers or networks. It also allows advertisers to reach more viewers across different platforms and devices with less effort and cost.
- Enhanced targeting and personalization. Programmatic ad spending on CTV enables advertisers to use data from various sources, such as first-party data (from their own websites or apps), third-party data (from external providers) or contextual data (from the content or device) to target their ads more precisely and relevantly to their audience.
- Improved measurement and attribution. Programmatic ad spending on CTV allows advertisers to measure the performance of their ads on various outcomes, such as brand awareness, consideration, purchase intent or sales. It also allows them to attribute their results to specific channels or touchpoints along the customer journey.
It appears there are glory days ahead for CTV, while traditional TV will continue to see a downward arrow in ad revenues, eMarketer concluded in its recent CTV-spend forecast.
“This transition will accelerate,” eMarketer said, “as digital platforms continue to scale and advertisers warm to the benefits of CTV advertising over traditional TV, which include better targeting and measurement options and the potential for interactivity, ecommerce and attribution.”