There’s no arguing that OTT and CTV advertising holds some incredible opportunities for marketers.
CTV is not only the key to unlocking your best audience but given the lack of players in the space, now is also the right time for advertisers to strike.
Despite these undeniable facts, marketers who want to gain a foothold in the new media landscape face challenges that need to be met.
Securing lucrative contracts, developing privacy-compliant solutions, and smoothing out the general fragmentation of the CTV ecosystem is essential to stable, long-term growth.
Here’s what you need to know and how a CTV advertising agency can help you overcome obstacles in the industry.
Table of contents
- What is Connected TV advertising?
- CTV advertising opportunities
- CTV advertising challenges
- Overcome obstacles with a CTV advertising agency
What is Connected TV advertising?
The way that we consume entertainment is changing. Today, a growing majority of Americans watch their favorite shows, movies, and media-on-demand via CTV.
Connected TV (CTV) refers to any television that connects to the Internet. CTVs can stream over-the-top content (OTT) beyond what is available from a traditional cable provider.
As the adoption of CTV continues to grow, marketers across all industries are taking advantage of serving non-skippable ads to relevant audience groups and content channels.
Moreover, video SSP data reflects this shift. Beachfront reveals that the number of Connected TV advertising requests grew 1,640% from 1.8 to nearly 30 billion requests from 2017 to 2018.
CTV Advertising opportunities
Advertisers across all industries are diversifying their ad spend and expanding their reach with CTV advertising. Here are the opportunities that OTT marketing and Connected TV advertising have to offer.
- A large audience growing larger
- Targeted advertising
- Ad-supported video-on-demand
- Data-driven insights
- Live OTT
An Opportunity: A large audience growing larger
One of the largest draws to CTV advertising is the opportunity to get your message in front of hard-to-reach Millennial and Gen Z audiences at scale – outside of linear distribution.
Although, it’s not just GenZennials breaking TV viewing habits via CTV, on-demand streaming services, and gaming channels. Research from MAGNA reveals that 4 out of 5 U.S. households will be reachable through CTV this year alone.
Other than documenting its vast reach, the adoption of CTV and OTT offerings opens up a diverse landscape close to the source of inventory for programmatic advertising.
An Opportunity: Targeted advertising
Perhaps the most significant attraction to CTV is the ability to capitalize on the convergence of video performance.
With precise targeting, CTV advertising bridges the gap between television and digital programmatic teams, making way for seamless consumer experience and omnichannel delivery.
Additionally, the notion of collaboration between media owners, device manufacturers, technology, and buying platforms is driving innovation, addressability, and automation.
How well these platforms work together is paramount to fulfilling the measurement and targeting needs of advertisers that aren’t available on cable.
An Opportunity: Ad-supported video on demand (AVOD)
- SVOD: Netflix, Amazon Prime Video, and Disney Plus
- AVOD: Hulu, YouTube, and Crackle
We hear a lot about subscription video on demand (SVOD) services like Netflix and Amazon Prime Video. However, ad-supported video on demand (AVOD) services like Hulu and YouTube are on the rise this year.
A large portion of viewing occurs in ad-supported environments, representing a dynamic and abundant reach for buyers.
According to the latest research on platform surfing by Samsung Ads, more than 60% of OTT video streamers watch AVOD platforms such as Hulu, Youtube, and Crackle.
An Opportunity: Data-driven insights
One of the passions for brands turning towards CTV advertising is the drive for unique performance insights beyond stand-alone metrics like viewability or time-in-view.
Nima Quidwai, Sr. Manager of Business, Development, and Advertising at Vizio, says that they are focused on first-party data collection across all screens.
That data is then used to maximize campaign efficacy, incremental reach, and the frequency that OTT marketing and CTV advertising can deliver for brands.
Automatic content recognition (ACR) also creates a unique opportunity for advertisers to gain access to relevant insights in real-time, right where their ad is running.
Sophisticated metrics and predictive performance innovation represent a significant step forward in maximizing ad spend and driving campaign success.
An Opportunity: Live OTT
Live OTT is a growing opportunity for advertisers as more audiences continue to shift away from linear to the world of streaming, including live OTT events.
Don’t get us wrong; linear is still very much valid for reaching a broad audience base. However, we predict that this year will bring new OTT entrants in VOD and the semi-live space.
With the growing consumption of OTT, more advertisers are shifting their dollars to digital programmatic channels.
As OTT offerings continue to saturate the market with subscription-based video on demand (SVOD) apps, OEMs will continue to search for new ways to simplify the buying process.
There is also an additional focus on safeguarding the user experience with live and semi-live OTT.
CTV Advertising challenges
Despite the apparent benefits of CTV advertising for advertisers, some challenges need to be met. Here are some of the obstacles platforms and providers are addressing to ensure stable opportunity in Connected TV advertising.
- Privacy-complaint solutions
- Platform fragmentation
- Ads-tracking on various platforms
- Consistent quality measurements
A Challenge: Privacy-compliant solutions
A top challenge this year is introducing privacy-compliant solutions to the market that protect the consumer while delivering on the promise of brand impact.
CTV providers like Roku are working towards solutions that meet these needs and encourage greater adoption of programmatic in the OTT industry.
Daniel Moorehead, Senior Manager of Programmatic Platform at Roku, believes that more brands will shift their budgets to OTT. As a result, the shift will foster better targeting and a higher frequency of CTV ad trade with programmatic.
Without these developments, brands risk missing out on a significant portion of their audience that is cutting the cord on linear.
A Challenge: Platform fragmentation
There’s no doubt that consumers love their on-demand streaming devices. The latest research from Samsung Ads reveals a growing trend in surfing among platforms.
The average TV household in the U.S. has 3.9 connected TV devices! Daily, consumers are switching between their preferred subscription video on demand (SVOD) and ad-supported video on demand (AVOD).
As new players enter the market, the fragmentation of the OTT and CTV space creates difficulty for advertisers. Some of the biggest obstacles include frequency capping, reach, and cross-platform measurement.
To overcome these challenges, companies, and media buyers are working toward solutions that complement linear buys without running the risk of under and over-saturating their audiences.
A Challenge: Oversaturation
Combatting the oversaturation of media inventory spread across CTV devices is a challenge for advertisers.
Today, we’ve experienced a significant rise in consumer utilization, and advertiser demand as content joins the OTT sphere. This content includes on-demand news, kid-friendly video, sports and lifestyle channels, gaming, and much more.
Over 200 over-the-top services mean more diverse options for advertisers. However, it also requires testing for buyers to learn which publishers can deliver results.
Platforms will continue to compete to stand out from the crowd. This differentiation will work to sway the hearts of buyers with transparency, comprehensive reporting, scalable workflows, and more premium content.
A Challenge: Ad tracking on various platforms
While there is a clear need for brands to push ad budgets to Connected TV advertising, there is still no way to measure audiences across varying devices and apps.
Although these measurement tools do exist, tracking tools such as cookies and IP recognition used to identify users varies from platform to platform.
Consequently, brands face challenges in regulating their campaign strategy to avoid over- and under-serving their ads. As new players enter the space, advertisers will look for the ability to gather statistics across data providers.
Despite the apparent opportunity CTV advertising has to offer, advertisers are pleading for a formalized process.
A Challenge: Consistent quality measurements
Last but not least, advertisers face a battle with the transparency of their content.
Although advertisers do have insight into the name of the app, and the genre level their ad ran on, they want additional insight into what episodes or shows the user was watching.
However, this information is typically held onto by content partners to protect viewer privacy. It’s also possible that content partners may fear that this level of granularity will stunt their growth.
This also brings into question – does the technology we have today allow for this granular of a data collection?
Despite these challenges, we expect that improvements in technology and the standardization of the industry will help to facilitate consistent quality measurement.
The need for independent and quality authentication of OTT/CTV is imperative to the success of the sector.
Overcome obstacles with a CTV advertising agency
More than 60% of U.S. households own a Connected TV, up 19% YOY. Advertisers that want to compete in this new medium are now realizing the opportunities that CTV advertising has to offer.
Of course, there is still progress to be made. As an industry thought leaders must have an open dialogue that addresses these challenges head-on.
Sooner or later, the way we watch television will transform into CTV. Whether you are an advertiser, buyer, or content partner, being a pioneer is going to pay off. As your CTV advertising agency, we can help you get there.
Learn more about Connected TV advertising with LiftIntent. View our case studies to see what we’ve accomplished for other organizations. Then, tell us your campaign goals, and we’ll send you our media kit.