Making marketing decisions on how and where to spend your budget is always a challenge. With the uncertain state of the economy, companies feel even more pressure to focus on expenditures that bring the best return. Where should they increase spending? Where should they pull back?
Brands are increasingly considering connected TV (CTV) as an option to reach consumers. With traditional linear TV use declining and an increase in the number of consumers using CTV devices, how can companies harness these two trends to reach fragmented audiences?
CTV Spending Increases as Traditional TV Spending Declines
CTV is growing. According to Nielsen, CTV content reached almost 142 million adults across the country each week in 2021. And, the number of devices purchased is steadily increasing. If your audience isn’t looking at their phones, there’s a good chance they’re looking at their connected TV device.
The numbers back this up. There are now more than 1.1 billion CTV devices in use worldwide. Subscriptions to streaming services reached 1.1 billion globally, a 26% year-over-year growth.
Meanwhile, a growing number of people - 79% of U.S. households - watch ad-supported and paid streaming services. Further, the global smart TV market demand was measured at 268.9 million units in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 20.8% from 2021 to 2028.
Given this data, it stands to reason that more brands are considering adding CTV advertising to their marketing mix. The appeal of TV ads is undeniable. They’re shown on a big screen, are longer in duration, are sound-on – and are offered in a premium, high-trust environment. However, traditional TV advertising has always been untouchable unless a brand has a big budget. Now, with ad-supported streaming TV reaching a meaningful scale, new categories of brands can take advantage of its strengths.
How to Get Started with CTV Advertising
The CTV trend is catching on at an economic moment when budgets are tightening. Yet, while brands and agencies understand the importance of taking advantage of the power of CTV advertising in its early stages, they may feel uncertain about the best way to get started.
Historically, TV as a format has been off-limits to smaller companies, niche industries, and attribution-minded advertisers. Now that CTV is available to all those marketers, the first movers will get the most benefit from this powerful format.
“This is a unique and short-lived moment where first movers really can build a mental moat around their brand in consumers' minds,” said Aaron Grote, senior director of identity and attribution products at Stirista.
CTV can be a more efficient way to use your budget because it’s much more targeted. CTV ads allow brands to target a specific audience through behavioral attributes, demographics, and location – and track them through detailed analytics. This takes the guesswork out of determining the right network, time slot or show.
Even B2B organizations are getting in on CTV ads, and interest in CTV is growing. Half the B2B marketers surveyed by Stirista earlier this year said it was “highly likely” they would add CTV to their marketing mix in the next 12-24 months (52%). However, nearly one out of two B2B leaders cited a lack of knowledge when it comes to CTV (46%).
As brands get started with CTV ads, it’s always wise to consider tying your goal to the business, not the medium. Determine your business-level KPI, and be sure to ask potential partners how they might approach driving toward and measuring this outcome.
“While channels like paid search can be good at attributing conversions to themselves, often the incrementality of those conversions is low, which means you aren’t getting very much actual growth for that dollar,” says Grote. “This manifests itself as positive-looking marketing dashboards, but less positive company-level metrics.”
CTV combines the power of TV’s format with the addressability and attribution capabilities of digital marketing, as well as the ability to coordinate with other digital channels for sequential messaging and cross-channel frequency management.
“The ability to demonstrate performance through attribution still matters,” Grote said. “Maintain a healthy amount of spend on channels that are good at reaching and converting new prospects and demonstrating their performance through attribution.”
Multiple Devices Equate to More Data
Many CTV users also connect with multiple devices, giving you more data, which can provide a much clearer picture of their preferences. This allows you to target your ads more precisely. Ads that are more personalized resonate more strongly with viewers, meaning more robust engagement and product recall.
“It’s critical to select a partner that understands data and can sift through the millions of data points in any one campaign to identify which points are accurate and useful – versus those that could lead you astray,” Grote said. “Look for a partner that provides radical transparency and highly detailed delivery reporting.”
CTV Helps Brands Reach Key Audiences More Effectively
As brands look for the most effective ways to reach consumers, CTV offers them the opportunity to better target the right audiences for their message. Brands and advertisers of all sizes should consider CTV advertising not only because it’s a growing trend – but because it works.