More users tune in as CTV continues to rise

Connected TV (CTV) has continued its impressive growth into the second half of 2021, solidifying its status as a new frontier for marketers and advertisers. CTV ad spend has soared over the last 12 months, surpassing $16MM per advertiser in the U.S., an +8% increase year over year. Although viewing habits have been shifting steadily towards streaming and Over The Top (OTT) services for over ten years, the COVID-19 pandemic has played a large role in CTV’s rise, shifting our media consumption habits forward. A Nielsen report found that CTV viewing remains higher than pre-COVID levels, despite lockdowns and restrictions easing in many markets.

CTV presents an exciting opportunity for marketers and advertisers as it offers unique opportunities to leapfrog traditional TV advertising. Innovative OTT services like click-to-buy on-screen products are set to increase in prominence, with Roku recently establishing its Television Commerce initiative. It’s not just streaming content to keep an eye on, gaming apps could be this platform’s hidden champion.

As it currently stands, the majority of CTV inventory is not sold by mobile marketing networks. As it continues to grow and as verticals like gaming become more prominent, this is likely to change. Google is very well positioned to capitalize on the fact that they own CTV inventory and are one of the larger CTV networks — you can advertise on the YouTube network via Google’s Advertising network. Apple and Amazon are also well placed, owning their own streaming devices and services. Facebook, who took a stab at CTV in 2016 but eventually shut down its audience network (partly because Roku blocked them from selling ads on its platform) announced this year their new approach: dynamic ads for streaming. The tool allows Facebook and Instagram users to click on an ad for a streaming service and see personalized, relevant titles based on their interests.

We saw an influx of new entertainment and streaming services in 2020 with the introduction of HBO Max, Peacock and discovery+. Although Apple TV+ and Disney+ launched at the tail end of 2019, they hit their stride in regards to original content in 2020 and Disney+ has started production on 57 new shows this year. Combined with the fact that cord-cutting is also becoming more prevalent (15% of U.S households canceled their cable subscriptions last year and this figure is expected to almost double by the end of 2021) and the picture is clear.

It comes as no surprise that CTV is predicted to grow exponentially over the coming years, with ad spend projected to reach $19 billion by the end of 2024. Despite cord-cutting, 78% of people still prefer watching video on TV — 82% of U.S. households are reachable via a Smart TV or television with an internet connection. In response to this, 60% of marketers have already shifted their ad dollars from linear to CTV and OTT advertising.

Video streaming might be the king of CTV, but there’s another vertical to keep an eye on: gaming, which is the second largest category on Amazon Fire TV and Apple TV. On Apple TV, gaming represents 19.6% of the total 16,241 apps, while on Amazon Fire it makes up 18.2% of the total 4,744 apps. When looking at the applications that are used most frequently, gaming is the second most popular category again.

The wealth of OTT and CTV advertising opportunities now available has played a large role in the rapid shift in the marketing landscape. Options like programmatic buying and/or working with platforms or publishers provides increased flexibility for advertisers. Younger audiences have already expressed their viewing preferences, with 54% of people between 18-34 streaming via CTV. In the U.S., investment in CTV grew by 40.6% in 2020 to over $9 billion.

Ad formats for CTV are continuing to grow and develop, providing marketers with a unique opportunity to combine the interactiveness of digital formats (tracking video completion rates and linking real-time ad exposure to conversions) with the visuals native to traditional TV advertising. With direct CTV ad buying, marketers have opportunities to incorporate UI and in-video banners, and even show ads on pause screens or menus.

CTV also provides the possibility of cross-tracking devices. With 76% of users globally (and up to 85% in the U.S.) second-screening, or using their smartphones while streaming, marketers can drive impressions through the CTV and retarget users with ads on their smartphones. Advertisers can also show relevant ads across multiple devices that are connected to the same network, which can give retargeting campaigns a boost.

CTV allows for the reach and quality of the TV screen while enabling the targeting and measurement potential of digital. OTT ads can be tracked with the performance marketing precision marketers are accustomed to, but having a measurement plan is vital. Having an MMP like Adjust makes it easier to comprehensively measure CTV performance with CTV AdVision, and to start making data-powered decisions in this relatively new space.

To learn more about how mobile advertisers are utilizing CTV and the buying, targeting and measurement of CTV ads, you can download our complete guide to mastering connected TV.