Connected TV Is Pushing Linear TV Out Of The Screen

Who does not personally know a cord-cutter or perhaps is one? Some of us are rather “cord-nevers”, i.e. somebody who has never subscribed to a traditional TV service and receives all content through a streaming service. 12% of the adult population are now cord-nevers and the median age is 33 (MRI-Simmons).

Nowadays, the Connected TV streaming platforms are plentiful. Netflix, Hulu, Amazon Prime Video, Disney+, HBO Max, Shudder, and the list goes on. More will be coming for sure. It is obvious that CTV advertising is here to stay and brands that want to advertise in this universe need to know the nuances and how to maneuver around the opportunities. CTV a growing advertising channel and the targeting possibilities will only increase as well. In this blog, I am going to give you a brief overview of CTV advertising.

I started my advertising career in national TV back in 2005 in Los Angeles. At that time, TV was “the” medium for high-reach advertising. Our clients wanted GRPs (gross rating points) or impressions (eye balls) on highly rated shows, events (Oscars anyone?), sports, and popular movies. It was the era of cable TV and national broadcast. To be seen around highly-rated content at the best possible cost was the MO. Is linear TV a dying breed? Maybe.

What are some of the advantages of advertising on CTV?

You can test different ad formats and A/B test
CTV ads collect data that can be applied to strategy insights
CTV ads can be measured and optimized
You can create highly targeted campaigns with CTV

Digital video advertising has become big business in the advertising world. In 2019, CTV advertising spend was valued at 6.38 billion U.S. dollars. It’s expected to grow to 19 billion U.S. dollars by 2024. That is almost 200% increase!

What are some of the reasons people become cord cutters?

Cable TV is too expensive and there isn’t enough value for the money
Streaming devices offer a better viewing experience with on-demand programming
People prefer binge watching
Original content on streaming devices is preferred

Cord cutting is accelerating across all age demographics but the 18-34 year old age group is taking the lead (Source: The Trade Desk):

Since cost is the largest reason why people cut the cord, most people do not want to spend a lot of money on streaming services post cord-cutting. Makes sense, right? Especially multiple streaming services can quickly cause a cost in monthly cost. This is why people are receptive to streaming platforms that have lower monthly subscriptions fees due to ads. Hulu seems to have a good business model that serves that consumer group. In 2011 Hulu had 1 million subscribers. In 2020 Hulu has 20 million subscribers. Hulu is doing something right.

The pandemic saw an increase in CTV subscriptions. People were stuck at home. What more can I say about that, right? The hunger for content has also increased and so has competition. Moving forward, a multi-device strategy will become more important for advertisers. 5G will make mobile devices even faster and the freedom to access content from anywhere, anytime, with fast data will become normal. CTV advertising is a fast-growing and interesting universe to follow closely. Let us take at look at some trends that I think could become a reality in CTV advertising:

Ads will eventually become clickable and take you to the brand’s website for shopping opportunities
The advancement of facial recognition technology could become a factor in CTV advertising
I believe that Wearables can be integrated. Your SmartWatch could know when you completed your CTV ad and then serve you a geo-targeted discount coupon when you’re in a shopping micro-moment
Lastly, I think we can see clickable product placements, i.e. you like the shoes a talent is wearing, you click on the shoes, and you’re taken to the shopping check-out landing page

As mentioned earlier, I started my career in advertising working in national TV back in 2005. How times have changed since then! The pandemic seemed to have given technology an extra push. I wouldn’t be surprised if we will have a pre- and post-pandemic technology classification in the near future. If you have any questions, comments, feedback, I’d like to hear from you. If you have any wishes for future blog topics, let me know. You can reach out to 4Elements Digital here. For now, be kind to each other out there and never stop learning. Cheers!