In an era that craves anytime, anywhere content consumption, it isn’t surprising that connected TV is dominating the charts. Consumers aren’t the only ones excited about CTV; advertisers are eager to connect with their audience through long-form video on a bigger screen.

This year, connected TV impressively surpassed mobile in digital video ad impressions. While some advertisers are ready to take the leap, others are a bit hesitant, thanks to myths and misconceptions that have been circulating about CTV advertising and OTT marketing.

We’re here to debunk those myths, so you have the most accurate information to make decisions on your marketing strategy.

Myth #1 – CTV advertising is too complex to understand.

It’s common for advertisers to shy away from connected TV advertising because they are not sure what it is or how it works. But it’s actually surprisingly simple. Connected TV is just television, delivered differently.

However, understanding CTV is not too difficult of a challenge to overcome. LiftIntent is here to help you navigate the complex ecosystem and break down the complexities surrounding CTV and OTT marketing.

To put it simply, the purchase of premium access to highly targeted audiences guarantees that your content is served to the exact people you want to see it, at the right time. You also have the benefit of knowing your ad’s reach, engagement, and conversions, all in a single place – something not found on linear television channels.

Myth #2 – Connected TV inventory is cheaper than other inventory.

The inventory found on OTT networks isn’t remnant anymore. When advertisers begin their OTT marketing, they are often surprised to discover that connected TV ads are priced significantly higher than digital video and comparable to or higher than linear TV advertising prices.

OTT TV ads are sold on a cost per million basis or CPM. CPM can run anywhere from $15-$50, with an average of approximately $25. Advertisers who have incorporated OTT marketing into their advertising strategies understand that the price for premium access to targeted audiences and real-time campaign reports yields higher quality engagement and better conversions.

It is widely believed that OTT channels have an unlimited supply of advertising space, but this isn’t the case. Four apps dominate the OTT spectrum; Netflix, Hulu, Amazon Prime Video, and YouTube. Amazon Prime Video and Netflix do not serve ads while users are streaming their content, although YouTube and Hulu offer ad-free subscriptions in addition to ad-supported content.

Myth #3: Connected TV is only for video ads

The bulk of CTV inventory is the ads that consumers experience before or during streaming content on their OTT channel through their connected TV. But video ads aren’t the only type of TV ad inventory available on OTT television.

The CTV ad experience isn’t limited to the apps themselves. Some smart TV’s, like Samsung, have released advertising on their home screens. Other connected TV devices may likely follow suit in experimenting with different ad placement. Already, we have seen other forms of advertising traditionally viewed on the Internet making its way into CTV, including display ads and native ads.

Myth #4: Only Millennials like to consume OTT TV

Proprietors of OTT marketing love to highlight the fact that millennials like consuming OTT content through CTV. But they aren’t the only ones gravitating toward instant video-streaming.

22% of CTV ad requests occur throughout the primetime hours of 8:00-10:00 PM. This means a growing number of video consumers are tuning out linear TV during the hours when top-tier ads are running. Thanks to simplistic access and ease of use, consumers from all generations and demographics are welcoming OTT into their homes with open arms. Gen X and Gen Z are in particular favor of streaming content over the Internet, with a large number of them growing up in cord-never households.

Americans aged 18 to 24 have experienced a 40% drop in the amount of television they watch per week. Brands who have chosen large-screen cable-network ad inventory are experiencing a particular hit, as the cord-cutter audience is a desirable purchasing power for most brands. Above-average income, education, and balanced demographics have contributed to the appeal.

Myth #5: Advertisers think it’s just like buying digital.

Although CTV is considered to be the frontier for data-driven transformation because it is theoretically addressable, it is not strictly the same as buying digital. In actuality, only a select few companies in the CTV ecosystem can take advantage of or collect identity and viewing data of their users. 

Ironically, it is those with the least TV inventory, or even none at all, who have access to the most data, including smart TV’s, direct-to-consumer apps, digital MVPD’s, companies, and ad servers with SDK’s installed. The programmers who own the bulk of CTV inventory must own the distribution channel to access consumer data.

Although precise data exists, it lives across a combination of apps and devices with varying tech setups and data share. Consumers themselves access content across a multitude of devices, making it difficult to track their footprint, which makes addressability in its current state a pipe dream.

The industry is working toward bringing this data together in three ways, through:

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    1. Partnerships between programmers and distributors.
    2. Development of new tech that will stitch together measurement, targeting, frequency and optimization capabilities
    3. The formation of industry standards.

    Myth #6: Consumers don’t like to watch ads.

    In December of 2018, Roku reported that subscribers spend an average of 2.8 hours a day streaming video on its platform. They also indicated that “free” was the most commonly searched term, which suggests an inclination toward ad-supported content.

    This means that subscribers to OTT networks don’t mind watching an advertisement in exchange for free content. A study by IAB reveals that the audience who streams ad-supported video OTT are affluent (a household with income over $75k+) and regularly watch ad-supported content.

    Myth #7: OTT marketing isn’t established enough right now.

    Some advertisers may feel like OTT marketing is an opportunity for tomorrow. But TV manufacturers don’t signify what, when, and how much we watch. Rather, modern individuals define the vector of media consumption and technology development.

    A study by the Pew Research Center reveals that 45% of the next generation are online almost constantly. For the majority of us, that means streaming video content through our Internet-connected TV devices onto our home screens.

    168 million Americans use connected TV.

    OTT may be relatively new compared to traditional means of television content, but it doesn’t lack substantial reach. 3 out of 4 homes in the U.S. own a connected TV, and an estimated 168 million Americans use connected TV as part of their large-screen media entertainment. eMarketer estimates that this number will surge by the year 2021, reaching numbers as high as 194 million CTV device owners.

    What does this mean for advertisers? Brands of all scope are all but guaranteed access to a sizeable audience. Not to mention that ad-supported OTT content is generally the fastest growing audience on OTT television.

    OTT networks ad revenue exceeded $2.7 billion.

    Considering the rapid rise in consumption trends, OTT network ad revenue exceeded $2.7 billion in 2018 (almost half the amount that TV captured in 2016). Advertisers alone spent an average of $14.2 million on digital video, with over $7 million going toward original video content. Budgets are expected to increase by more than 25% in the next year, surpassing $18 million, with more than half of the budget allocated for original content.

    Major networks and content providers are joining CTV.

    The shift toward OTT content hasn’t gone unnoticed. Major networks and content providers already have offerings to join connected TV. Recent acquisitions include CNN, WB, Fox Sports, CBS, and Disney – with more added monthly.

    The bottom line

    Connected TV uses the best of television and online video advertising. Although similar to the linear TV experience, there is a higher ability to reach target audiences because of the first-party data apps can provide.

    Overall, CTV advertising offers better targeting opportunities and cross-platform data, which can result in a higher conversion rate for advertisers. With the increase of cord-cutter audiences, improved ad recall rate, and a decrease in banner blindness, it is apparent that the new media is outperforming existing environments – including mobile.

    Don’t let the various myths and misconceptions surrounding connected TV advertising stop you from considering CTV and OTT in your advertising plan. Learn more about CTV, browse our case studies, and receive a free media kit by contacting LiftIntent today.