In recent years, mobile phone screens and desktop monitors have taken advertisers' attention away from running campaigns on the family TV. With more people cutting the cable cord and relying on internet streaming for programming choices, connected TV in the family room is moving ahead.
Connected TV is popular with cord cutters, or those who have ceased paying for TV services in the home. According to eMarketer estimates, about 33 million have stopped their subscriptions to a paid TV service. Another recent report, the "Q1 2018 Nielsen Total Audience Report," found that the average U.S. adult now spends more than 11 hours each day listening to, watching, reading, or interacting with some form of linear or digital media.
Connected TV is a key reason for the uptick in media consumption. While there might be some growing pains in the category, connected TV is showing it's living up to its initial hype.
In the past year, connected TV has doubled its advertising growth, overtaking the number of impressions over mobile devices. The "Q2 2018 Video Advertising Benchmarks Report" from Extreme Reach found connected TV had 38 percent of video ad impressions in 2018's second quarter. Those video ad impressions are mostly from consumers' preference for platforms such as Hulu, Netflix, Roku, Apple TV, Google's Chromecast, and others during the U.S. prime time of 8 p.m. to 11 p.m.
The anticipated growth of connected TV means a comparable increase in video advertising. But it will be online, through connected TV.
Analyst firm Forrester notes that all the big players, including Facebook, Apple, Amazon, Netflix, and Google, are looking to a future in which consumers watch video online rather than on traditional linear TV channels. It will likely lead to a more fragmented video world. There will be more on-demand video content consumed, and more opportunities for advertisers to reach these fragmented audiences at different price and reach windows.
Advertiser Benefits on CTV
Here are the benefits of advertising on connected TV:
It's easy to get ads seen by a target audience faster: Connected TV gives marketers and advertisers a more accurate route to reaching relevant viewers. Instead of aiming for large, general audiences, marketers can narrow their ad campaigns for a more relevant reach.
There are opportunities for specific targeting: Connected TV advertisers are getting more sophisticated about targeting methods, including first-party, third-party lookalike modeling, CTV retargeting, and cross-device targeting. This area is expected to grow in importance in the coming months.
Ads are shown fewer times on CTV: Instead of a barrage of ads coming in between programming segments on traditional TV, ads on connected TV are fewer in frequency. This results in higher view-completion rates because consumers aren't overwhelmed by ads.
Connected TV consumers are in a more receptive, relaxed state of mind: Connected TV viewers see ads when they are ready for entertainment. Advertisers believe this increases the chances a brand's ad to make a good impression on viewers, compared to other platforms when this may not happen.
Ads can become shoppable: Making connected TV ads more interactive and useful to consumers is a priority for online advertisers, as it's easier to build interactivity into ads over connected TVs.
Netflix, YouTube, and Hulu are all showing increased usage over connected TV. As advertisers catch up to meet these receptive audiences, the connected TV category looks to grow incrementally in the coming years.