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October 20, 2022

If You Don’t Understand the Importance of CTV, You are WAY Behind.

Tony Treadway

Understanding CTV article.

In a recent interview I granted to a trade publication editor, I mentioned Connected TV (CTV) as the new media resource that advertisers are rushing toward. The response from the editor was, “What’s CTV?”

CTV is a subset of something termed Over the Top (OTT) that refers to the delivery of video content online and not through a cable box or over-the-air broadcasts by local TV stations. CTV refers to the device in which you’re accessing that video content, combining the delivery mechanism with the viewing experience, via the big screen in your living room. Thus, if you are watching Hulu on your smartphone or desktop, then you are streaming OTT content. If you are watching Hulu through a Roku Stick that’s plugged into your living room TV, then you’re streaming OTT content over CTV.

It’s important to understand as CTV advertising is expected to hit $27 billion by 2015*.

CTV offers a myriad of advantages over ads delivered by broadcast or cable, specifically involving targeting. We recently executed a campaign using CTV that specifically carved out advertising to consumers who regularly shopped at a particular supermarket who lived within a five-mile radius of a store and who were military veterans or active duty military families and fans of their local professional sports teams. By cross-tabulating various data sets, advertisers can carefully hone their targeting to reach a specific audience. It likewise provides metrics on whether they watched the TV commercial through to completion. It is powerful information that advertisers can now use to better measure the effectiveness of their ad spending. Further data analysis can track those exposed to ads all the way to purchase.

As consumers have swapped their old TVs for new, Smart TVs that have built-in access to streaming channels, advertiser access to CTV homes has risen to 93%** of all U.S. consumers.

The leading subscription-based streaming services.

Related to CTV are new offerings by top streaming networks to offer lower-cost subscriptions to those willing to watch commercials. The most recent was NETFLIX announcing that it would offer a cheaper ad-supported subscription fee of $6.99 per month for those willing to watch up to five minutes of commercials per hour on its network beginning in November 2022. The move came after NETFLIX reported a decline in subscribers after it raised its monthly subscription fee for ad-free viewing.

According to a new report by LG, 80% of consumers say they currently watch free ad-supported streaming networks and 67% say they prefer free access compared to paid streaming subscriptions. As inflation continues to impact consumer pocketbooks, 31% of respondents to the survey said they intended to cancel their streaming subscriptions in the next year. As for broadcast and cable TV viewing, 21% said they are watching less and less of the form with many cutting their cable wires in favor of OTT and CTV.

All of this serves as a great example of how an ad firm that knows how to navigate a new era in ad media opportunities is crucial to effective ad spending for now and 2023. If you would like to learn more about CTV as part of your integrated plan, let’s talk.

*eMarketer, 2022
**LG Consumer Survey, September 2022