2020 may not be a year that anyone wants to remember, but as 2021 progresses, it’s useful to reflect on the period when working from home – indeed, doing everything at home – became the ‘new normal’ and what this signifies for the months ahead.
And one small bright spot for the advertising industry is the rise of Connected TV (CTV). The streaming wars have introduced more top-tier inventory as an increasing number of players get into the game and more TV shows and movies come into play. People are looking at second (and even third) screens and are either glued to their favorite shows or have them on in the background; it’s fair to say that so much time on the sofa is leading to a rise in CTV.
COVID, CTV, and viewing habits in general
As pandemic-enforced lockdowns confined people to their homes, they – unsurprisingly – watched more TV. This trend was boosted with the launch of various new platforms, including Disney+, HBOMax, and NBC’s Peacock (with the UK progressing services such as Viacom-owned Pluto, Samsung TV Plus, and Roku). In short, Covid plus new content fuelled a big rise in CTV viewing.
Meanwhile, as everyone adapted to home-based entertainment, the ever-popular Netflix added a record number of subscribers to its roster in the second quarter of 2020. Growth has slowed as the pandemic boom subsides, with the company also citing lack of new content for the decline; this reasoning seems to be borne out by the three million new subscribers gained by HBO Max during the first quarter of 2021 when it made its entire collection of this year’s content available on the platform, as well as in theatres (albeit for a limited period).
Also Read: The Future of Advertising: Connected TV
At BidSwitch, we’ve seen advertising across CTV grow 150% year-on-year, representing a global ad spend increase of 140% for the channel; this growth predominantly centered on the US, where the uptick figure was 253%, with the UK seeing a rise of 129%. Perhaps even more significant in these times is that, while in 2019, the majority of US ad spend took place in the evening, during 2020, midday and the early afternoon saw a greater share-of-voice.
CTV in 2021
The extraordinary and unprecedented nature of 2020 led to a surge in CTV uptake. And while it is unlikely that the medium will see the same levels of growth this year, it seems some pandemic-driven behaviors will stick, with one of these being the shift to streaming services (particularly as the platforms continue to add original content, increasing their appeal still further with consumers).
And as CTV viewing expands, so too will advertising on the channel so that it will account for an increased proportion of both digital and TV spending during 2021. CTV ad spend is predicted to see an annual increase of 27.1% in the US, compared to 7.5% for digital. In the UK, Emarketer forecasts CTV users growing from 40.9 million in 2020 to 44.4 million by 2024.
Programmatic ad buying for CTV
CTV is increasingly being recognized by marketers as more than a ‘tick box’ in a request for information (RFI).
This recognition opens up opportunities for programmatic ad buying. Programmatic CTV media trading is not identical to ‘standard’ programmatic, with differences including the need for ad stitching (‘stitching’ the ad and program content together to ensure there is no buffering), ad pods (multiple ads sequenced together for an ad break), and pre-fetching (requesting and storing the ad ahead of the commercial break).
However, marketers are realizing the benefits of rise in CTV; not least that it combines the big-screen experience of linear TV with the data targeting capabilities of digital. But it’s still early days; looking ahead, as the market for CTV grows and matures, offerings will need to expand to include solutions for measurement and identity.
Quality content standards
For CTV advertising to reach it’s potential, content needs to be of a consistently good standard. For example, sellers need to ensure they use Server-Side Ad Insertion (SSAI), the process of inserting ads into long-form content by ‘stitching’ (see above).
As well as the obvious benefits of non-disrupted video playing for the consumer, SSAI helps to prevent ad blocking; the one pod of stitched-together content (ads and video) presents a single content stream that can bypass client-side blockers. This also helps to avoid any latency or errors that may occur as a result of ads being displayed separately from the video content.
Sellers also need to ensure buyers receive all the relevant information about their inventory in the content object; there are many variables, with the key ones including the episode number and season of the show, along with its title, genre, and rating. This helps buyers to gauge whether the inventory is suited for an adult audience (Game of Thrones) or is child-friendly (Paw Patrol).
In addition, Identifier for Advertiser (IFA) is useful for sellers to provide. The extension allows partners to clarify the origin of the device identifier and whether it was provided by the device itself or generated by a publisher/supplier, with options including Android TV, Roku, Amazon Fire, Apple tvOS, the publisher provided ID, and SSP provided ID.
IFA benefits advertisers by allowing them to better target users based on campaign settings; they know who is using Roku when they are trying to gain new users for Amazon Fire, for example. From a privacy perspective, IFA also includes a Limit Ad Tracking feature, which requires consumer consent for the device identifier to be sent with the ad request.
Here to stay
Aided by a wealth of new content platforms, the rise of CTV is one of the many trends that, already in progress, were accelerated by the pandemic. And while the long-term ‘new normal’ is yet to be defined, an additional channel on which to reach a relevant, engaged audience, seems likely to be welcomed by advertisers.