A new report by Innovid highlights the state of CTV advertising adoption.
When people were confined to their homes last year, due to the COVID-19 pandemic, the desire to stream television, films and videos online increased even further as consumers needed an escape from the chaos that was ensuing outside. The freedom to view content on any device, at any time, became even more of a necessity for consumers in quarantine, accelerating the viewership from linear to connected TV.
Make no mistake, this trend was already happening pre-pandemic but the pandemic has only managed to accelerate it even further. As a result, marketing teams have started putting more ad dollars into the space. Brands are discovering that CTV allows them to create more interactive ad experiences that can draw higher engagement and conversions. In fact, eMarketer forecasts CTV advertising spend will reach $11.31 billion in 2021 and increase to $18.29 billion in 2024.
Online advertising technology company, Innovid, surveyed more than 100 brand marketers and agency executives to understand where the industry stands in their CTV adoption journey.
Where do we stand?
As stated earlier, the trend in consumers shifting to CTV was happening pre-pandemic and advertisers were paying attention. When surveyed as to when advertisers began pouring investments into CTV advertising, 41% began shifting investments between one and three years ago. However, nearly half began either less than a year ago (24%) or have not started at all (24%), which means many brand marketers are still figuring out or have reservations about how to effectively reach consumers through CTV.
Nearly half of the respondents in the survey are well aware of the benefits of marketing through CTV. 64% of respondents hope to achieve a stronger connection between digital and TV while 63% of respondents believe CTV advertising will allow them to precisely target their audience.
As the world slowly begins to open up again, consumers are now heading out and spending more time outdoors but their content consumption habits haven't changed. Many are still consuming content in convenient, digital-first ways, be it through their mobile devices, laptops or smart TVs. While pandemic-fueled viewing trends have increased CTV advertising adoption, brand marketers are also building CTV into their strategy because of its flexibility — specifically the ability to change the creative messaging of campaigns in real time.
The benefit of CTV advertising is that it can seamlessly fit into an omni-channel marketing mix. When respondents were asked what other channels do they run advertising alongside CTV, majority cited a mix of social media, display advertising and mobile video.
The challenges advertising are facing in CTV advertising?
While a majority of advertisers have managed to see a return on ad spend (ROAS) on CTV advertising, a third of respondents have not yet quantified exactly how investing in CTV has impacted their ROAS. This suggests that marketers are facing challenges when it comes to accurately measuring the success of their CTV campaigns.
One challenge is the fragmentation of CTV. With more options launching in the market, from new original equipment manufacturers (OEMS) to ad-based video on demand, CTV is becoming more and more fragmented by the day and marketers are finding it difficult to efficiently measure advertising performance. When asked, respondents cited targeting the right audiences and inconsistent measurement as prime challenges they faced while incorporating CTV into their advertising mix.
What does the future of CTV hold?
The future of CTV will include new ways to engage and grow audiences, as brands increasingly adopt it as a permanent tool in their omnichannel marketing mix. But marketers also understand that in pivoting to CTV, they will need to tackle hurdles such as inventory fragmentation and inconsistent measurement. As a result, marketing teams are looking to invest or partner with platforms that will help them consolidate their omnichannel strategy to efficiently deliver, personalize and measure ads across all screens and devices. 68% of respondents are considering partnering with an ad-tech company to better measure their performance.
Advertisers who are equipped with these tools will perform better in a television world that increasingly moves online and away from the cord.