by Tom Oxley
, Op-Ed Contributor,
September 28, 2018
By this time next year, the 25 million households across the country that own connected TVs (CTV) will think nothing of shampoo ads gracing their screens as they settle down in front of "American
Horror Story" Season Nine.
The idea of CTV advertising may have recently caused ripples in the media world and beyond, but rumours that Amazon is on the cusp of serving ads and Netflix is close
behind are rapidly gaining momentum.
CTVs -- meaning anything ranging from smart TVs to streaming devices to game consoles -- offer a kind of advertising that falls somewhere between traditional
TV commercials and digital ads. Guaranteed to be full resolution, I have recently seen them called "lean-back branding experiences," which certainly hints at their vast cinematic potential. And with
promos for Netflix series currently being served between episodes, here is why brands in the UK should now be preparing themselves for this genuine opportunity:
- The growing
user pool and prospect of targeting specific audiences makes CTV advertising particularly attractive. Data comes from a range of areas, including authentication and device ownership and
content-consumed sources. Especially interesting is the proliferation of a younger and more affluent profile on CTV. The "cord-cutters," which are the silver bullets for many brands, could now be
within easy reach.
- There has been a sizeable 178% increase in CTV ad impressions from 2016 to 2017, and the trend seems set to continue. Once the preserve of the tech-savvy --
with only one in ten households owning CTVs just four years ago -- CTV device ownership is now nearing the TV ownership rate, and over 50% of UK households will have one next year. The UK also has
solid foundations to support CTV ad industry growth, with 91% of households that have fixed broadband connections and 91% of those that are over 4mbps.
- The US is often a
good bellwether for future UK behaviour and CTV is rapidly rising in the States, with the number of CTV viewers approaching 200 million, and 147 million CTV sets. Although we’re not yet in
the realm of the US, the UK does offer the largest CTV market in Europe, and CTV advertising is expected to grow to £220m in 2020.
- The rise of live event streaming
provides more impetus for CTV market expansion. Although this is a relatively new development, it is expected to grow quickly.
- More good news is that CTV pre-roll
ad view time is substantially higher than on other platforms. A 2017 study showed that viewers pay more attention to CTV advertising. Eye-tracking results show that 89% of the ad was viewed compared
to 81% on mobile and 78 % on desktop. It also comes out on top on unaided recall. The same survey showed pre-roll ad recall was 73% recall for CTV, compared to 69% on mobile and 65% on desktop.
With ticks in the boxes for viewability, recall and targeting, the opportunity is clear. But there are still a few hurdles to overcome before CTV becomes stratospheric. Quality inventory
is still relatively limited and fragmented, with many ads being privately sold and not yet served across the major broadcasters.
And the age-old issue of measurement is
also a stumbling block. The industry is currently undecided on how to best track activity, which means it is currently difficult to justify investment decisions. However, Nielsen and SpotX have been
undertaking some interesting trials in the US over the last couple of months.
So brands should be poised and ready to embrace the CTV advertising opportunity. The medium
will grow rapidly as soon as the big players like Netflix and Amazon Prime push the button, which is surely only a matter of time.