By Jay Bemis | Advertising Systems Inc.
Connected TV continues to attract not only cord cutters — it also has become a hot ad buy for smaller advertisers with lower budgets and smaller geographic needs. Those smaller advertisers are finding that CTV can offer them the same benefits, such as more precise targeting, that larger advertisers have been enjoying from their CTV ad buys in recent years.
Connected TV refers to internet-connected devices, including smart TVs, that allow users to stream high-quality video content and access a wide range of video-streaming services. Such services include Hulu, Netflix, Amazon Prime and Disney+.
CTV’s chief rival in the ad world remains linear TV, also known as traditional TV to many marketers, which includes those people who still subscribe to cable and satellite providers.
This year is expected to be a benchmark among the two advertising options, with CTV and linear viewers each projected to hit 233-million viewer totals in the USA.
Smaller advertisers are finding CTV ad buys can offer them not only more precise targeting to their smaller geographic areas, but also these benefits, according to a report last week from Forbes:
- Customized and personalized messaging;
- Interactive capabilities;
- Measurable return on advertiser investment;
- And, the ability to calculate the performance of ads and a growing audience as viewers continue to migrate to streaming.
Forbes noted that programmatic ad buying, a chief strategy that search marketing experts are employing these days, also is playing an important role in the rise of CTV ad buying.
3 Milestones to Mark CTV’s Ascent This Year
Those three key milestones, as the experts at eMarketer noted in a recent webinar, are, namely, ad spend, viewers, and CTV’s major players:
1) CTV will claim one-third of overall TV ad spending in 2024.
US advertisers will spend $28.75 billion on CTV this year, growing 18.8% year-over-year, per an eMarketer forecast released in March, its senior analyst, Ross Benes, told the recent webinar. That will equate to 9.5% of all digital ad spend.
“When (we)) conducted this forecast for the first time in 2019, just five years ago, CTV was one-tenth of total TV ad spend,” Benes said. Since then, CTV has grown fourfold.
2) The number of US CTV viewers has surpassed linear TV viewers.
CTV viewers will reach 233.9 million in the US this year, while linear TV will see 232.3 million, eMarketer projects. The gap will continue to grow in coming years. “It’s a trend that’s been working toward its inflection point for the better part of a decade,” Benes said.
“Cord-cutting is happening at a tremendous rate.”
3) Five streaming services will exceed $1 billion in ad sales.
Hulu, YouTube, Amazon, Roku and Peacock will each generate more than $1 billion from their ad business this year, according to eMarketer’s March forecast. “We now have large-scaled ad businesses for advertisers to spread their money,” Benes said during the recent eMarketer webinar. “Soon, this list will grow to seven or eight streamers.”
Amazon Prime Video, thanks to the launch of an ad-supported tier in January, will see the largest amount of CTV ad revenue growth this year, increasing 125.0% YoY to reach $3.13 billion, eMarketer says.
2024 Elections to Keep Linear Hanging in There
Long a popular form in election years, linear TV will continue to enjoy billions of dollars in advertising revenues by the end of 2024. Not only do those revenues include the presidential race, but congressional, state and local elections as well.
With more than $10 billion up for grabs from political war chests, linear and CTV are expected to share equal amounts in advertising revenues from that record amount of political spending.
Forbes in its recent report said news channels provide another example of local CTV growing in popularity with advertisers, especially smaller advertisers, in this election year.
“Local newscasts are personality driven with a loyal audience, who are more likely to vote, making it a popular vehicle for political ad messaging,” Forbes noted.
CTV’s enhanced data capabilities, it said, will allow smaller advertisers “greater geo-targeting and hyper-targeting capabilities in reaching persuadable voters on any specific campaign issue …
“Ads can be geo-targeted reaching voters in specific voting districts, by income (and by) party affiliation, among other data points.”
