Television has always been a powerful advertising medium, and in recent years, the rise of Connected TV (CTV) has opened up new opportunities for brands to reach audiences through video advertising.
CTV refers to any TV that can be connected to the internet and can stream video content, including Smart TVs, gaming consoles, and streaming devices like Roku, Apple TV, and Amazon Fire TV. CTV is rapidly becoming the preferred way for people to consume video content, and as a result, it has become the fastest growing video advertising platform.
Why CTV is Growing So Fast?
There are several reasons why CTV is growing so fast. First, there has been a significant increase in the number of people who are cutting the cord and cancelling their cable or satellite subscriptions.
According to data, in 2022, there was 60.5 million monthly connected TV users among millennials, which is expected to hit 62.6 million by 2025. More and more users are now turning to CTV to stream their favorite shows and movies.
Second, CTV is more accessible than ever before. With the proliferation of affordable streaming devices and Smart TVs, people can now access CTV content from anywhere, at any time, and on any device.
Third, CTV provides a better viewing experience than traditional TV. With CTV, viewers have the ability to pause, rewind, and fast-forward through content, which is not possible with live TV. They can also access a vast library of on-demand content, including movies and TV shows.
Finally, CTV is highly targeted, which means advertisers can reach the right audiences with their messages. Unlike traditional TV advertising, which targets broad demographic segments, CTV advertising can be targeted based on specific criteria such as geography, interests, and viewing behavior.
Statistics that Prove the Importance of CTV Advertising
Connected TV (CTV) advertising has rapidly become the most demanded platform by brands to reach their target audience, surpassing even mobile advertising. The following statistics demonstrate why CTV is considered the future of video advertising:
- According to a MarTech poll, 98% of businesses anticipate that Connected TV advertising will outperform mobile in the next two to three years.
- CTV ad impressions already account for half of all video ad impressions, which is nearly double that of mobile ad impressions, according to a report by Invoid and Digiday.
- CTV has entered the mainstream, with more than one-third of American households using streaming as their sole source of television entertainment.
- As of 2022, approximately 87% of US TV households have at least one internet-connected TV device.
What are the Benefits of CTV Advertising?
There are many benefits of advertising on CTV. Here are just a few:
- High Engagement: CTV viewers are highly engaged with the content they are watching, which means they are more likely to pay attention to ads that are displayed during their viewing experience.
- Targeted Advertising: As mentioned earlier, CTV advertising is highly targeted, which means advertisers can reach the right audiences with their messages.
- Cost-Effective: CTV advertising is generally more cost-effective than traditional TV advertising, as it is possible to reach the same number of viewers at a fraction of the cost.
- Measurable: CTV advertising is highly measurable, which means advertisers can track the effectiveness of their campaigns in real-time.
- Ad Formats: CTV advertising offers a variety of ad formats, including pre-roll, mid-roll, and post-roll ads, as well as interactive ads that allow viewers to engage with the content.
The Future of CTV Advertising
The future of CTV advertising looks promising, with the platform set to become even more popular as people continue to cut the cord and shift towards streaming. According to industry data, CTV ad spend is expected to reach a staggering $27.47 billion in the United States by the end of 2025.
The Covid-19 pandemic has accelerated this shift, as more people have turned to streaming platforms for their entertainment needs. Prior to the pandemic, 76% of US households had at least one connected device, and 12.5 billion hours of content were streamed each month. During the pandemic, these numbers surged by 81%, resulting in 4 billion hours of CTV use per week.
However, advertisers must strike a balance between the number of ads and their relevance to viewers. According to a survey by Hub Research, 86% of consumers are willing to see CTV ads that are relevant or entertaining, but 40% of the audience is likely to reject CTV if there are too many ads.
To capitalize on this trend, buyers are planning to increase their CTV ad budgets significantly in 2023. According to the Interactive Advertising Bureau (IAB), buyers are reallocating their ad spend from broadcast (53%) and cable TV (52%) advertising to CTV. This shift in ad spending demonstrates the growing importance of CTV as a vital advertising platform.
CTV is the fastest growing video advertising platform, and for good reason. It offers advertisers a highly engaged and targeted audience, a better viewing experience for viewers, and a cost-effective way to reach a broad audience. With the continued growth of CTV, advertisers who are not yet using this platform should consider incorporating it into their advertising strategies to stay ahead of the competition and reach audiences where they are spending their time: streaming video content on CTV.