As a marketer, utilizing all available channels and tactics efficiently is always the key to any successful advertising campaign. This is easier said than done, though, as there’s a challenge in choosing the right platform for execution: digital or traditional. Recently, connected TV has emerged as a channel that combines the experience of traditional linear TV viewing and digital measurement capabilities: connected TV. As a user, it’s likely you’re in the exact audience that connected TV reaches, but in case you’re confused, let’s go over what connected TV is.
Connected TV (CTV) refers to any TV that can access the internet and provide content through a Wi-Fi connection beyond what’s available via a cable provider. This type of content is commonly known as “over the top” (OTV), a term that refers to any streaming media provided to consumers over the internet and not through traditional platforms like multichannel and broadcast television. CTV can also be leveraged on devices other than TVs, such as media players like the Chromecast, Apple TV, Roku and Amazon Fire TV, TiVo, and even gaming consoles like the Xbox One and PlayStation 4. To understand the industry and impact of this new, emerging channel, we must first look at how consumer behavior has changed.
CTV has grown significantly in consumers’ homes
74 percent of homes have at least one connected TV device. Among homes with any connected TV device, 57 percent have three or more, with a mean of 3.8 devices per connected TV home. CTV also now accounts for over one-in-five hours of all TV viewing. Connected TV streaming in the home has tripled since 2015 and has replaced the desktop as the platform of choice for binge-watching. The average viewing session on connected TVs, 77 minutes, is twice the amount of time viewers spend watching streaming video on personal computers and mobile devices.
Advertisers’ buys of CTV also reflected the growth
Connected TV impressions increased by 178 percent year over year. Advertisers that ran their campaigns over CTV also increased impressions by 30 percent, and more than half of all impressions among broadcast publishers were served to CTV devices. Completion rates for connected TV, at 95 percent, are 27 percent higher than desktop and 32 percent higher than mobile.
Industry giants then took actions to capture this opportunity
Nielsen launched its further-enhanced cross-platform campaign measurement of advertising inventory, including mobile and over-the-top (OTT) audiences across all devices. With this enhancement, Nielsen will provide media buyers and sellers with comprehensive, independent measurement across all platforms. This will enable the market to monetize campaigns across TV and digital using the same measurement standards currently used on linear TV. AT&T crammed together two multibillion-dollar acquisitions to bolster its advanced TV business. Liveramp also boosts its capabilities by adding connected TV IDs to its cross-device identity graph, including browser cookies, mobile operating system IDs and smartphone device IDs.
With all this data, one must ask, what are the benefits of running in this emerging channel?
Connected TV provides solutions for challenges that traditional TV faces: frequency and audience targeting. When ads are served at a national level through cable, each household will experience different frequencies, but when they’re digitally served, the frequency can be controlled as desired. TV audiences can now be linked to their other devices, meaning 1:1 connection and attribution across channels is a reality (DATAXU). Furthermore, connected TV is highly brand-safe in OTT apps such as Hulu. Since the environment is very content-specific and unlike the web environment on desktop or mobile, CTV avoids pitfalls commonly seen in other digital channels. Additionally, CTV allows for audience scale that might’ve been a challenge for advertisers in the past. Research shows that homes with streaming devices are 30-percent more likely to be higher income, earning more than $100,000 per year. Finally, 100 percent of impressions to your target audience means zero waste, a higher response rate and a lower cost-per-action than traditional buying. With all the benefits of CTV, why aren’t advertisers jumping in?
According to a 2018 Nielsen study, CTV isn’t perceived very well by marketers
68 percent of participants ranked search and social media as “very” or “extremely”-effective marketing channels, while only 28 percent of marketers ranked over-the-top TV/CTV as a “very” or “extremely” effective. However, it’s important to also note that over 30 percent of respondents have yet to dedicate media budget to OTT TV/CTV. As the channel continues to evolve and become more established, it’s expected that more advertisers will engage with CTV. Furthermore, CPMs for OTT/CTV inventory are often 10 times higher than those of standard digital video inventory. Though premium inventory, this pricing could still make advertisers reluctant to dive into this new channel, especially those who struggle with video/streaming tactics.
Regardless of certain challenges, CTV proves to be effective and provides additional opportunity to expand on current campaigns. Connected TV bridges the great elements of linear TV and digital channels to produce more opportunities to reach the right audiences. As linear TV proves to be more difficult for brands to gather inventory due to pricey upfront and limited inventory, advertisers can now showcase their products in a living room viewing environment with measurement capabilities. Additionally, 87 percent of consumers reported using over-the-top devices (like smartphones, computers and tablets) when watching digital content on a connected TV for:
- Texting with friends about a show or movie
- Searching for information about an actor, movie, show or product during a TV commercial
- Reading, posting and searching on social media about a show, movie and/or commercial
Digital channels solve many problems traditional media face; however, they’ll surely encounter their own problems as the landscape evolves. Connected TV emerged as a solution for places both digital and traditional channels can’t reach simultaneously, and will only grow exponentially alongside other media technologies in 2019. As the forerunner of hybrid marketing channels, connected TV is paving the way for even more innovations and strategies.