A connected TV (CTV) is a device that permits online content streaming. Some CTVs have internal computers that enable direct access to streaming channels while others connect to set-top boxes, laptops, and smartphones, allowing streaming by proxy.
This arrangement differs from conventional TVs that can’t access the internet or receive it wirelessly from other devices. It may be possible to display streaming services on traditional TVs indirectly but it requires suitable ports, like HDMI.
Furthermore, CTVs are not the same as over-the-top (OTT) TVs. The former offers streaming services while the latter includes options to stream digital video from external devices, such as games consoles.
Market Overview
The market for CTVs is rising. U.S. figures suggest a growth rate of 22.4% with ad spending rising to $30.1 billion in 2024.
Moreover, usage is increasing. American adults watch 123.4 minutes of content on CTVs daily in 2024, up significantly from previous years — great news for advertisers.
Currently, the chief player in the market is Roku with a 48% share. Amazon Fire TV takes second spot with 28%, followed by Apple TV at 8.5%, Google Chromecast at 6.8%, and Android TV at 5.5%.
Emerging Trends in CTV for 2024:
As CTV grows, various trends are shaping the platform. Paying attention to these can help you adapt your advertising priorities.
Here are our top connected TV trends:
1. Increase in Ad Spend
Top of the list is the increasing ad spend, vital fuel for the industry. EMARKETER’s figures suggest it is the fastest-growing format of all digital channels, expected to grow at 22.4% in 2024, with estimates pushing revenue to $40.90 in 2027.
Linear TV during sporting events, like the Olympics and World Cup, is excellent for ads (including those targeted at older folks). However, CTV is more effective in general, owing to better CTV analytics.
2. Enhanced Personalization and Targeting
Another trend is using AI and analytics to create personalized TV ads for viewers. CTVs, like other digital devices, can collect information to customize campaigns and communicate with audiences better.
Systems are doing this through a combination of behavioral and predictive analysis. These uncover deep patterns in client behavior and leverage them through various marketing channels to generate more engagement and appeal.
3. Interactive and Shoppable TV Ads
Another trend is the rise of interactive ads that engage viewers directly. These foster participation over passive absorption of ad material, making it more compelling.
Shoppable ads also integrate with CTV content because of technological advances. The idea is to create “shoppable moments” when audiences are most likely to hit the buy button.
4. Expansion of Original Content
The expansion of original content is also a feature of some CTV products. Amazon famously excels at this on its platform, but many other independent studios are making shows for theirs.
Popular shows on Amazon Fire TV include The Lord of the Rings, The Peripheral, Outer Range, The Boys, and many others. This exclusive content aims to attract views and generate publicity for Amazon’s Prime service, but there are.
5. Cross-Platform Integration:
Finally, CTVs are integrating with other digital ecosystems to make them more practical for brands and viewers. So-called cross-platform advertising wants to bring campaigns under a single banner, allowing firms to be more consistent across platforms.
This approach offers viewers a more seamless experience across devices. Ads appear the same regardless of channel.
Technological Innovations
The emergence of CTV is bringing real innovations to the table, complementing existing digital media trends. And many of them are helping to make advertising on the platform as compelling as conventional channels, or more.
Advanced Measurement and Analytics
These developments are particularly in the realm of measurement. Superior transparency lets advertisers see how many people view their ads each time they show them. Integrations with Google, Amazon, and Disney provide pay-per-click-(PPC)-style control over what viewers see and when.
Transparent and accurate metrics are essential for knowing when ads appear and on what device. Data can show audiences how ads are targeting them, and the methodologies they use.
Programmatic Advertising
At the same time, programmatic advertising is emerging on CTV. These use big data strategies for more precise demographic and psychographic targeting compared to the early days of CTV advertising (when it was only pre-roll and mid-roll ads). Users see content that appeals to them with reduced error, cutting costs for advertising and broadcasters and avoiding annoying uninterested groups.
Privacy and Data Security
With these developments, consumer data privacy concerns are affecting the CTV ecosystem. Leveraging personal information to target ads remains a controversial practice.
However, CTV offers some advantages over other channels. These include:
Being less reliant on third-party cookies from conventional digital advertising
Using CTV to respond to CCPA and GDPR requirements
Adapting better to future privacy requirements and regulations
Because of these structural differences, 83% of advertisers feel confident using CTV to adapt to privacy restrictions. The platform presents fewer risks.
Future Outlook
Going forward, the CTV market is likely to undergo significant tech-driven changes. These include the dominance of free ad-supported television (FAST), AI blocklists to ensure content aligns with brand messaging and interactive shopping experiences. Standardized measurement practices may also emerge, unifying CTV with mobile, desktop, and other channels.
Because of this, CTV advertisers and content creators will find opportunities everywhere. Brands can use the channel to position themselves as thought leaders, generate leads, and retain existing customers. Teams can also leverage data-driven optimizations to improve performance and distribute similar content over multiple channels.
Even so, significant challenges remain for the future of television. Despite recent CTV market growth, non-traditional ads may require stakeholder buy-in. Furthermore, it may be challenging for smaller brands to achieve the necessary content quality for platforms to air ads.
Conclusion
Programmatic advertising and the focus on analytics means CTV is becoming more like conventional PPC. However, it doesn’t suffer from the same privacy and regulatory concerns as other digital approaches. As such, CTV will likely continue to expand (as the above estimates suggest), reaching more people in more places.
Always stay informed about CTV and adapt to these emerging trends if you are a media professional or marketer. Understanding the changing landscape could enable you to improve your ad ROI or generate more revenue.
Originally posted on ADvendio.com on 10th June 2024
