Interactive, Measurable, Relevant: How CTV Will Continue to Shape TV Advertising
With the increasing prevalence of connected TV (CTV) devices in homes worldwide, CTV is becoming a powerful advertising platform. This growing opportunity is reflected in the significant rise in its influence in media buying, with the IAB predicting a double-digit growth of +13.8% in CTV investment this year.
The continuous expansion of the channel's advertising potential is driven by several factors, including streaming embracing ad-supported tiers, continuous improvement of content offerings, and the growing availability of qualified, independently audited metrics – such as audience data provided by Barb.
Advertisers are now more familiar with the current state of CTV, but what does its ongoing evolution hold for them and the future of TV advertising?
Key factors shaping the future of CTV
There are some key trends already apparent that will have a growing impact on the landscape over the coming years.
Programmatic and data-driven targeting continue to create new audience experiences. We're all familiar with how two different people watching the same streaming show might see entirely different ads based on their interests and behavior. However, new developments now allow ads to be aligned with the tone, genre, or themes of the content. This ushers in a new era of advertising, where ads are more timely and situationally relevant, naturally integrating into the viewing experience.
In the context of accelerating the creative process, AI is playing a big part. Advancements are enabling greater personalisation faster, customising creative elements based on location or specific audience attributes. However, recent campaigns fully generated by AI offer a cautionary tale about how much creative input AI should have.
Along with advanced targeting and dynamic creative opportunities, attribution is gaining importance. As such, we are seeing the rise of Performance TV, with brands able to measure everything from top-of-funnel engagement to purchase behaviours, thanks to new measurement techniques and ad formats.
Opportunities invariably come with challenges. There's still significant audience fragmentation across platforms and devices. Furthermore, the global installed base of smart TVs and CTV devices is projected to reach 4.2 billion by 2030. This likely means a growing number of local variants of operating systems to contend with.
In this fragmented environment, building standards is a challenge. Due to the lack of a shared measurement currency, defining "success" is subjective, which hinders industry-wide collaboration. Despite this, there’s some appetite for taking a collective approach, with players agreeing that breaking down silos, defining what constitutes premium video, and enabling third-party verification are key steps to achieve both standardisation and scale
Zeroing in on growth areas
As the pace of innovation increases, CTV presents an increasing array of opportunities for advertisers and agencies, with three areas being particularly promising.
1. Format innovation
New ad formats are gaining traction, bringing a host of benefits. Pause-screen ads – for which Channel 4 was something of a pioneer – and native ads, that appear on the homescreen as audiences search for something to watch, enable advertisers to reach viewers even when content is idle. These formats aim to catch audiences in the moment rather than increasing the length of ad breaks, which marks a significant improvement over the less refined methods found in some digital environments.
Interactive and e-commerce features are also becoming more popular, thanks to their ability to generate immediate impact. FreeWheel's recent Viewer Experience Lab report found that viewers were 80% more likely to seek information online after seeing a shoppable ad compared to watching the same brand’s standard mid-roll ad.
While these ad formats have value and drive viewer response, a careful approach should be adopted to preserve the benefits. The report indicates that an excessive use of innovative formats in a stream can be counterproductive, leading to annoyance and ad fatigue
2. Creative renaissance
On a creative level, interactivity has the power to drive novel, highly immersive and sensorial advertising experiences. We've already seen some experimentation in this area from Sky, utilising voice control features on Sky Glass TV sets and remote controls. Viewers can give voice commands that take them to a page dedicated to the advertiser, hosted in the interface.
By opening up new opportunities, CTV can facilitate a creative renaissance where interactivity and personalisation intersect. This fertile blend will create viewing experiences that evolve in real time based on user engagement, positioning CTV as the central hub for a new entertainment paradigm.
3. Media buying: bridging global consistency and local relevance
A prominent trend in media buying is the adoption of a global strategy with local nuances. Advertisers want to tap into global reach with localised relevance, while maintaining budget efficiency. Unlike other digital channels, where media sales teams tend to adopt a silo approach, hindering brand unity and relevance, CTV has made significant strides in balancing scale and consistency with personalised, localised experiences.
This has been possible through a combination of advanced data practices, consistent audience definitions, and the introduction of unified buying platforms. At the same time, advertisers can leverage CTV's dynamic programmatic capabilities to deploy consistent creative globally, while still allowing for local customisation and real-time optimisation. So, for example, a global sports wear brand can run a worldwide campaign under its flagship theme while showing region-specific sports stars, languages, and cultural touchpoints depending on the market.
From an agency perspective, CTV’s ability to bridge global strategy and local relevance, can be key to unlocking more value.
The biggest star on the CTV horizon
With precise targeting capabilities on a global and local scale, immersive environments and huge potential for creative innovation, CTV is quickly positioning itself at the pinnacle of advertising.
However, amidst technological advancements and industry efforts, one element will stand out: ad relevance. This represents one of the most crucial outcomes of years of investments in innovation, which aim to deliver an optimal viewing experience on the most engaging screen in the house.
Even though these innovations are within reach, advertisers and agencies need to make sure they understand how they can get the most out of CTV and streaming, evolving their strategies as the channel continues to develop. It's vital that they stay ahead of trends and support their own ability to innovate, as competition is bound to ramp up sooner rather than later.
[Editor's note: This is a contributed article from Comcast Advertising. Streaming Media accepts vendor bylines based solely on their value to our readers.]
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