Marketers Adjust to CTV’s Rapid Growth and Manage New Side Effects    

Advertising on Connected TV (CTV) isn’t new, but it’s gaining traction. Vivvix, Kantar’s ad tracking unit, reports that CTV achieved $1 billion in ad spend in June 2023. That’s a milestone, but it comes at a time when AVOD (Ad-supported Video on Demand) revenue is also booming — projected to hit $19.99 billion in 2023, according to Statista Market Insights.

But some hurdles remain, including ad overexposure and learning to navigate this increasingly crowded market. Ad market fragmentation is a widespread forecast, and no single strategy addresses all those concerns. 

In this article, we’ll explore five trends driving CTV in the second half of 2023. 

1 — The Gen Z Effect

CTV is projected to grow by 21.2% this year, according to Insider Intelligence. What’s driving this push in ad spending as the general economy putters along? There are multiple trends at play. According to Wells Fargo analyst Steven Cahall, cord-cutting continues, with a 7% year-over-year increase in 2023. The same Insider Intelligence report shows that the rise in CTV’s ad spend coincides with a US linear TV ad spend decline. Another trend: Gen Z is opting out of linear in droves — nearly 55 million will subscribe to CTV in 2024. 

However, you may ask, what will Gen Z do on CTV apart from watching “Euphoria,” “Dear White People” and “Elite”? According to KORTX, the answer is they will engage in interactive CTV shopping, which comes with a robust engagement rate. “Nearly half (45%) of Gen Z are regularly shopping on their phones while watching television, per Samba,” reports MarketingDive. The upshot of this insight, notes MarketingDive, is that “advertisers no longer need to repeatedly put an ad in front of consumers to hopefully generate a purchase down the line — they need to compel an immediate action.”

In a nutshell, reports Digiday, “Interactivity allows brands to measure authentic actions — such as clicking an interactive element with their remote, scanning a QR code or adding an item from a shoppable video to their cart — and leverage those metrics to optimize campaigns and drive purchases.” 

Changing the focus to interactivity may yield another dividend: campaign efficiency. 

2 — Taking Away Mobile’s Dominance

Mobile’s dominance has always been a mix of convenience and economics, and reaching them as they shop across multiple platforms makes it easier to seal the deal. According to Insider Intelligence, CTV is so engaging that it’s even (slowly) eroding mobile’s minutes-per-day dominance. “US adults will spend an average of 230.3 minutes per day on mobile in 2023, according to our forecast. While they will spend less time with connected TV (CTV), at 114.9 minutes per day, the gap between CTV and mobile is shrinking.” The upshot is that CTV is engaging viewers and rapidly gaining converts. 

3 — The Not-so-Slow Switch to Sports on CTV

Sports may not seem like a new frontier, but sports marketing is looking for CTV to breathe new life into campaigns — and appeal to younger demographics. The sports content is there.

According to SportsPro, a publication, Major League Soccer (MLS) on Apple TV+, a $12.99 monthly subscription for current subscribers, is going well, particularly after superstar player Lionel Messi’s decision in July to sign with Inter Miami. AppleTV+ is also making its presence felt to a lesser extent with Friday Night Baseball, where a subscription is required to take a swing.

The Media were all over the YouTube TV $2 billion deal last December to wrest control of the NFL’s Sunday Ticket package featuring out-of-market football games long-controlled by DirecTV. This comes from Amazon seizing control of Thursday Night Football games, which it streams on Amazon Prime. If you’re a hardcore NFL fan — or advertiser — you’ve gone or soon will go a-linear.

4 — Staying on the Rails

Undoubtedly, the future looks bright for CTV, but is unbridled growth leading some newbies astray? Even though there’s been a significant amount of investment in CTV, it remains an emerging channel with options such as adjusting campaigns in flight that are new to some marketers. There’s considerable fragmentation among platforms and providers to navigate. A recent study highlighted in Digiday concludes that the boom times in streaming have resulted in “ad overexposure” and “eroded purchase intent — a 16% decline among those who viewed the ad six times.”

In the ‘80s, a former actor turned politician famously said, “Trust but verify.” Yes, the context was entirely different, but the sustaining truth is that CTV success requires a viable plan and accurate measurement. 

5 — Measuring Up

CTV measurement is nothing if not complicated, and no single system dominates in the digital space, especially for cross-channel measurement. As Viant SVP of Business Development,Tom Wolfe pointed out in June, CTV measurement is up for grabs. For a company to win in the CTV measurement space, he wrote, they must “possess the experience and aptitude to accurately and efficiently forecast and measure audiences, combining multiple, rich sources of deterministic data validated by effective, representative probabilistic sources, such as an owned-and-operated panel. The company must be solely and uniquely focused on measurement, solving problems such as population representation with sound methodology.”   

Ending the Year Strong

CTV is enjoying robust market investment, and advertisers will benefit from adopting a proven approach to succeed in this space. Despite some growing pains for CTV advertisers, people-based methodologies combined with an AI-enabled DSP can give marketers the control necessary to target and measure audiences correctly. Having a capable DSP marketing partner enables advertisers to deliver a compelling return on ad spend (ROAS) results. 

For example, Viant’s people-based technology equips marketers with the advertising solution to reach current, new and potential target audiences on each household device with personalized advertising campaigns via the Viant Household ID and DSP. Viant’s Advanced Reporting capabilities provide cross-channel measurement to understand the impact across today’s media landscape — from streaming CTV to in-store purchases.

Using Viant Household ID equips marketers with insights to define reach and frequency accurately, and working with a digital partner versed in the space can help them sustain programmatic success.