Getting Ahead of the Curve in CTV Advertising

Compared to when streaming first started, there are now more platforms and content options. This is great for consumers because they have more choice. Recent engagement growth has been happening on platforms that are not traditional subscription video-on-demand (SVOD) services. This has created opportunities for advertisers and agencies.

Almost 142 million adults in the U.S. watch CTV every week. The trend for watching streaming is also impressive, with people aged 2 and up watching almost 30 billion minutes of streaming in the first quarter of this year. That's up from 13.5 billion minutes in first-quarter 2018. So it's not surprising that eMarketer forecasts that CTV advertising will reach almost $27.5 billion by 2025, up massively from $2.64 billion in 2017. This year, the forecast is about $13.4 billion

CTV is not just a U.S. thing. In Europe, more than 50% of advertisers and nearly 100% of agencies say that CTV/addressable is a key growth area for digital video over the next 12 months. That growth is expected because of increasing consumer demand- over-the-top (OTT) subscribers in Western Europe are estimated to increase from 133 million in 2019 to 159 million by 2023, according to eMarketer forecasts. In fact, last year 50% of the CTV audience in Europe watched streaming content daily, according to Statista survey findings.

The CTV universe is very large, so it can be hard to know where to advertise. Some people think that CTV, OTT, and streaming are the same as Netflix and Amazon Prime. But a lot of streaming happens on websites that aren't Netflix or Amazon Prime. In the first quarter of 2021, 25% of all TV use happened through video streaming. And Netflix, Hulu, Amazon Prime, and Disney together only accounted for 12% of that total.

Many people are watching TV shows and movies online now. This is because new companies have started to offer TV shows and movies for free, with ads. Other companies, who have been in the business for a long time, are also starting to offer their content this way.

As a result of the CTV boom, this year's upfronts looked different. NBCUniversal, Fox, Discovery, Disney, WarnerMedia and ViacomCBS all made presentations to advertisers touting their ad-supported offerings. This shift is one that we have been tracking closely. Ad-supported and linear streaming platforms had grown to account for 34% of streaming among streaming-capable homes in the U.S. as of January 2021. That is up six percentage points from the prior year.

Despite the many opportunities, the CTV space can be complicated for those who are not familiar with it. As we discuss in our new CTV guide for marketers, it is common to see "OTT" and "CTV" used interchangeably. Knowing how to evaluate the opportunities in the space hinges on understanding the nuances amid a vast and complicated ad buying landscape.

There are a variety of ways to purchase CTV ads:

1. Original equipment manufacturers (OEMs) like Samsung and Vizio.
2. Virtual multichannel video programming distributors (vMVPDs) like Sling TV and Pluto TV.
3. Content owners like FOX and NBCU.
4. Demand side platforms (DSPs) like The Trade Desk.
5. Private marketplaces (PMPs), or a mix of all the above.

When evaluating which approach is best for your objectives, don't just check off the boxes. Consider how deep and wide each capability is:

1. Confirm how the vendor collects first-party data and what its permissible uses are.
2. Look into how the vendor's identity graph solution is built.
3. Understand the diversity and quality of inventory offered.
4. Assess the ease of audience discovery, activation and optimization.
5. Explore the creative execution opportunities available.

You can make sure that you have the tools you need to target people with your ads. You can also make sure that your ads are interesting to people and that they are changing with how people are consuming media.

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