Connected TV's Momentum Gets The Spotlight

“If there’s a line that separates a market trend from a wholesale transformation, it looks as though connected television (CTV) has just crossed it.”

That’s the attention-getting opening line in the just-released Q2 Video Benchmarks Report from Extreme Reach, an asset management solution for TV and video ads.

Why the drama? Because the quarter marked the first time that CTV accounted for half of all video ad impressions, across a wide variety of categories, delivered by the server on Extreme Reach’s AdBridge platform.

“While that's an explicit universe and not necessarily representative of average U.S. video consumption or ads delivered to viewers, it’s nonetheless a telling milestone from a company that has been tracking the evolution of video ad serving in recent years,” noted MediaPost’s Joe Mandese.



The 50% mark represents 2% growth over this year’s first quarter, and an impressive 31% increase over Q2 2018, when CTV’s share of impressions was 38%.

Meanwhile, tablets’ share of impressions dropped by 33% versus Q2 2018, and desktops’ dropped by 31%. Mobile’s share declined nearly 17%, and this marked the fifth consecutive quarter that CTV has outperformed mobile on impressions.

One key factor in CTV’s ad growth: At a time when brand safety and fraud avoidance have never been more valued, CTV impressions are almost exclusively served to premium publishers, who sell nearly all CTV inventory directly to agencies and advertisers.

Noting that premium publishers’ share of overall impressions across devices and categories rose by 31% vs. Q2 2018, to 83% (versus 17% for media aggregators), the report points out that the steady rise in impressions served to premium sites “reflects two things: the high level of trust advertisers have for premium publishers over aggregators, and the strength of connected TV in the digital landscape.”

Indeed, among direct-to-consumer advertisers — known both for being performance-driven and as advertising innovation bellwethers — 99.8% of video ad impressions in Q2 were served to premium sites.

(Intriguingly, however, the automotive category — also considered an innovation bellwether — was an outlier in two respects. It showed a 51% jump in impressions served by aggregator sites, and a 27% decline in impressions delivered to premium sites, versus Q2 2018. This — like the new CTV ad marketplace noted below — may be an indicator that CTV inventory is becoming more available through programmatic. In addition, on the devices front, automotive showed a 30% decline in CTV impressions and a doubling of mobile impressions versus Q2 2018.)  

Advertisers are also drawn to CTV’s viewing metrics — including an average completion rate of 95%.

Extreme Reach notes that OTT ad revenue as a whole grew 73% between 2017 and 2018 and is projected to jump by an additional 25% this year. That would translate to a doubling of ad revenue between 2017 and 2018, from $1.2 to $2.6 billion.

The company also notes that globally, analyst firm Digital TV Research estimates that CTV ad revenues will reach $129.3 billion in 2023 — nearly double that of 2018.

The report points out that “it’s not just brand investment that’s heralding the ascendance of CTV”: Brands go where consumers go, and “viewers continue to shift to connected TVs in their living rooms, where more and more video is being consumed.”

However, it also points out that “while much of CTV’s growth has been attributed to cord cutters, the truth is that CTV is rapidly becoming just another way to watch content for everyone…

“Sure, there’s the cord-free sub-group of viewers who only watch via over-the-top or connected TV devices, but of the 70% of today’s U.S. OTT subscribers, 65% still have an active linear connection. In a content everywhere world, it’s important for advertisers to note that consumer viewing trends and this quarter’s results underscore how viewers continue to want their video wherever, whenever, however and over as many devices as they choose.”

In another piece of news, CTV streaming video distribution and advertising services company Wurl announced the rollout of a new advertising marketplace called AdPool.

According to Wurl, AdPool lets premium video publishers sell their CTV ad inventory to “thousands of advertisers, ranging from global brands to local businesses,” to complement (or replace) their direct sales channels.

Ads are individually targeted in real time for each TV viewer, enabling publishers to charge higher fees, on the assumption of greater efficiency for advertisers. (Cost efficiency can be another matter, but that argument’s too complex to dive into right now.)

One statement that seems less arguable came from Extreme Reach’s Vice President of Advanced Advertising, James Shears: “The growing prominence of non-linear TV options is giving advertisers a wealth of new opportunities for engaging with consumers in meaningful ways, especially when you consider the new targeting technologies that enable unprecedented levels of personalization. It’s important for marketers to broaden their focus and take advantage of the fragmentation while finding those devices that work best for their brands.”

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