COVID: The Driving Force For Growth in the CTV Ad Ecosystem

Since the onset of COVID-19, increased digitalization has been an undeniable trend. The time spent on TV viewing has almost tripled. What’s more, linear TV viewers are clearly shifting to CTV. Let’s find out why.

COVID-19 is changing consumer behavior — and, therefore, the whole digital advertising ecosystem. There has been a huge rise in streaming media services and viewership. For marketers, this significant increase in viewership is a wonderful opportunity to reach a larger audience and implement advanced targeting strategies into their advertising campaigns. Indeed, there’s an increased investment in the digital television ad ecosystem with the funds coming primarily from broadcast and cable TV budgets. On top of that, as eMarketer states, advanced television ad spend will top $10 billion in 2021 while the linear TV ad spend is expected to have a 22.3% drop.

As things stand today, when it comes to decision making, brands are becoming more data-driven. Said differently, every new initiative they embark upon requires a detailed analysis with regard to ROI and benefits.

Moreover, in the post-coronavirus landscape, as traditional TV viewing returns to normal levels, digital TV consumption stays above the levels it was before the outbreak of COVID-19. Actually, according to one recent study, connected TV viewing during the first week of May, remained impressively high (3.5 billion hours) compared to a typical week of January (2.7 billion hours). Adding fuel to the fire, the very first week of May featured 81% of the former average annual hours spent on connected TV devices.

The Superpowers of Connected TV Ad Ecosystem

In these unpredictable times, when ad budgets in the ecosystem can balloon or drop quickly, for brands it is important to consider the ad channels that are worth investment. With the industry already under stress simply because of the new TV series delay, the cancellation of major live events and as most bets are off, 2020’s upfronts are vastly different than usual. This year, the streaming-only events will be the TV Upfronts and Digital Content NewFronts. As a result, 41% of advertisers believe that networks are likely to abandon the Upfront model of committing to a year’s worth of ad buys in advance.

With this in mind, ATV advertising seems like an attractive alternative because it brings digital precision and analytics combined with television experience. Consider the following: managing identity and precise targeting are the pillars that stand at the core of efficient ad campaigns and ATV has it all. On top of that, with ATV ads, it’s possible to reach those TV viewers which can’t be reached by means of traditional TV commercials: highly-elusive cord-cutters, cord-nevers, and those who install ad-blockers on their devices. Finally, ATV video ad viewability reaches an amazing 98% of audiences compared to the 68% found through display video viewability.

In short, these are the key benefits CTV ads can bring you:

• Better targeting. You can target your audience based on their interests, geo-location, device, type of viewed content, language, and so on. With the first and third-party data, you’ll reach more valuable audiences on every screen. 
• Retargeting. CTV advertising can be a perfect fit for your multi-channel ad strategy. Very often, reminding a user of a product they were viewing will be enough to get the needed results. 
• Reporting and audience measurement, including unique potential customers. Digital television advertising offers real-time performance tracking and round-the-clock access to analytical tools. You can adjust your connected TV ad according to consumer behavior shifts.
• Frequency capping. Viewing one ad is good, viewing three advertisements is okay, but nobody wants to stare at the same ad creative ten times a day. Luckily, with CTV ads, marketers can better control ad frequency and modulation, also ensuring that the ads are not shown in the same pod as a competitor’s.
• Creative formats that can entertain the target audience. Dynamic in-stream ads, Pause ads, QR ads just to name a few. These formats are not only engaging, but minimally distractive. By default, personalized HD-quality interactive video, call-to-action, static, and animated ads are short, but result-driven. They can increase campaign performance and drive consumer engagement. Today, there are no analogs for traditional TV advertisements on the market. 

The importance and power of CTV ads are difficult to overestimate. But what makes the CTV advertising ecosystem so powerful is that it comes with an ability to measure the results of campaigns with both digital and traditional metrics and afterwards, it gives advertisers the ability to adjust to changing consumer patterns.

Simply put, wherever consumer behavior is shifting, advertising spends should be reallocated in response. This is especially crucial in the post-COVID world as consumer behavior keeps changing on a daily basis. The way people live, shop, work, do business, and relax has changed a lot and might continue to, so brands should tailor their creative messages with the following trends in mind:

• Besides keeping social distance and wearing masks in public places and on public transport, people are now used to using technology more to work, buy online and pay in a hands-free way. And as was already mentioned, more and more linear TV viewers are switching to CTV because of the flexibility, choice and personal time management connected TV has to offer.
• There are many changes in the way people interact and recreate. Check out some of these examples: for many, greetings between friends and family now consist of a nod or a wave, rather than an effusive hug or kiss. People discovered hobbies and interests they might never have had before. Plus, there’s a tendency in taking a lot more time and consideration over cooking. Having said that, why not take this into account as you create your next ad creative?
• People learned that in most cases, it’s possible to work from home and discuss everything in an email or over video conferencing software like Zoom, etc. rather than spending hours talking about the same matter during a long face-to-face meeting.

With this in mind, it’s obvious that marketers must rethink the dayparting, visual creatives and ad formats that would fit the “new normal”. Interestingly, in these pre-COVID times, advertisers could just come up with a media plan at the beginning of the year, make some tweaks once a quarter, and that was it. Now things have changed completely and to succeed, it’s of paramount importance to be able to change the media plan according to consumer behavior throughout the year. Luckily, within CTV ads, it’s possible to get real-time data-based insights and optimize campaigns, change messaging, targeting, and activation tactics.

The Forecast for Connected TV Advertising

According to IAB, the average connected TV ad in 2020 is poised to hit $16M per advertiser. Marketers are likely to seek more reliable measurement solutions to boost their ROI in this lucrative ecosystem. On top of that, it’s expected that we will use more tools powered by artificial intelligence (AI) to predict consumer behavior and improve loyalty. Working with cleaner, more accurate data means having more qualified leads.

The breadth of CTV inventory available to advertisers is likely to enlarge as consumers continue cord-cutting en masse.

As we look towards the future, we expect that consumers won’t be relying on just one or two ways of consuming video content, instead, they will be using a combination of different platforms, often across different devices and at different time instances.

With this in mind, in order to leverage all the online advertising ecosystem trends, brands should partner with a reliable SaaS ad monetization platform. Typically, a powerful ad tech platform cooperates with an extensive network of premium publishers that offer high-quality content, vast reach and advanced advertising capabilities. That being said, it’s possible to facilitate scalability, data access, and supply transparency compared to what a buyer is likely to get partnering with traditional supply-side platforms (SSPs).

Final Thoughts

Whether we care to admit it or not, Coronavirus has forced a global rethink. The way people live, buy, work and relax has changed and is changing. First of all, they are using technology more: to work or spend quality time with family or friends. The need for online access and devices at home is now regarded as a must-have rather than a nice-to-have. With this in mind, there’s no surprise why more and more traditional TV viewers are now switching to ATV. On top of that, a huge choice of content options, flexibility along with the ability to decide what to watch and when are conveying a sense of exclusivity people adore so much.

Meanwhile, the CTV ad ecosystem that comes with powerful targeting capabilities disrupts the whole video advertising industry as we know it. Not only does it cut down on wasteful budget spending by getting your ads only in front of people who care, but also it is packed with an array of advanced capabilities that help brands succeed and stay ahead of the pack.

The changes in consumer behavior are leading to a shift in advertisers’ and publishers’ behavior as well. Publishers and ad tech companies offer brands the ability to switch creatives quickly and provide data-driven insights into how different messaging is resonating with consumers. As a result, advertisers shift to CTV ads and pour more ad budgets into the ecosystem.