Understanding the Connected TV Opportunity: A Guide for Advertisers
Connected TVs are becoming so embedded in our daily lives that it can be easy to forget just how extraordinary their impact has already been.
On-demand viewing has become the norm, binge watching has grown into a global pastime. While at one time there was a focus on channels and schedules, today consumers think in terms of platforms and personal choice.
All of which means a new and significant emerging opportunity for brands, as CTV matures, and leaves its Wild West phase in the past.
But What does ‘Connected TV’ Mean in 2022?
The precise definition of what counts as a "connected TV" (CTV) has undergone several evolutions, but generally serves as a useful umbrella term that gathers smart TVs, streaming devices such as Roku or Amazon fireTV, and–increasingly–video game consoles connected to screens.
And so it is that we find ourselves in an era where viewers choose their own content in their own time, through a device hooked into the internet. That is something that provides an unmissable opportunity for brands and advertisers–and at Cognitiv we’ve seen that the savviest of them are already enthusiastically embracing CTV’s potential.
For example, in 2023 the amount of money US advertisers spend on digital video programmatically will surpass traditional linear TV spend for the first time. Explicitly, CTV is fueling a lot of that growth. This year alone, CTV will account for around 20% of programmatic video ad spending, or around $15 billion. And more than half of that will be traded programmatically. At the same time, 60% of US marketers have said that they were shifting budget from linear to CTV.
Something is clearly happening around CTV, which begs a question...
Why Is So Much Ad Spend Moving to CTV?
Simply put, CTV provides a premium, extremely brand-safe environment where the audience’s freedom to choose their own content means they are deeply engaged. At the same time–at least from the viewer perspective–the ads seen take the form of a familiar, trusted format.
The founding potential of CTV for brands is that it brings a vast audience scale, at a time when elsewhere there are less and less opportunities to capture the attention of your intended audience. We’re also seeing a shift in how people expect to "pay" for TV content, and it's certainly telling that Netflix recently announced during their earnings call that they were going to consider an ad-supported tier.
But the more specific opportunity is that those looking to embrace the CTV opportunity now have programmatic as a way to really deliver ads that have their intended impact with the right kind of audience. Simply put, programmatic in a CTV context allows you to serve highly contextually relevant ads, while letting you target users who are particularly likely to be engaged by a given brand, product, or campaign.
Solving the Tracking Challenge
CTV, however, is still a new space, and as an industry marketers are having to rethink how they understand and track engagement and impact. Established notions like cost-per-completed-view or completion rates are not very fruitful when applied outside of a web environment.
Consider that around 90% of people have a smartphone in their hand when they're watching television, for example, while over 60% of them will search for a brand that they've seen on an ad. That’s fantastic news for the brands. The problem is, how do marketers connect those dots? That’s proven extremely difficult for marketers.
How do you deterministically measure whether somebody exposed to that ad then went online and took an action? At Cognitiv, we have a device graph that maps over 300 million CTV devices in the US to an anonymous, individual online identifier. For marketers this means being able to measure how impactful your CTV ads are, and which audience is responding. Furthermore, our device graph approach allows for measurable creative experimentation. Combining these powerful data signals with the power of deep learning algorithms allows for true performance marketing.
Deep learning’s ability to identify complex patterns in huge data sets allows our advertisers to then find other people who display similar patterns in behavior and are likely to convert or respond to that same ad in a similarly positive way. Deep learning also endows that process with remarkable accuracy and efficiency, meaning delivering relevant ads to the right consumers in the vast, demographically diverse audience that CTV offers.
All of that can be done with conventional video ad content, meaning there’s no need to wrangle with new formats or the process of building bespoke content.
The real question, then, is why would you not move to embrace the tremendous CTV opportunity?
[Editor's note: This is a contributed article from Cognitiv. Streaming Media accepts vendor bylines based solely on their value to our readers.]
At the end of the day, the goal in having publishers extend their content offerings to the CTV medium is to prime themselves for the future—to continue to grow their audience and diversify their content in a way that will have impact, and resonate. The time to take the leap is now.