Connected TV has become more popular in the ad tech industry. Just like an infant turns into a child, then a teen, and finally into a person who makes a living, CTV’s growth has been incremental with leaps and bounds.
As traditional TV is becoming more irrelevant in today’s internet dominated world, CTV is quickly spreading its roots and taking space in the ad ecosystem. This is not specific to a region; CTV growth has now become a worldwide phenomenon.
What is Connected TV(CTV)?
Connected TVs are the televisions that use the internet to stream videos. E.g Roku, Chromecast, Fire stick, Apple TV, etc.
Reasons Behind the Growth of CTV
The CTV market in the ad industry has been booming due to the Millennials and Gen Z population. The demand and adoption of streaming services have been skyrocketing for video advertising, and there are various reasons for it. Let’s dive deeper to know the reasons behind the growth of the CTV ad ecosystem.
Why did people start to use CTV?
- Migration to streaming services: As streaming platforms, namely Netflix, Amazon PrimeVideo, Disney+, and Youtube, have become more attractive to people with their content and catering to a wide variety of audience tastes, traditional TV is losing its relevance in video advertising. Thereby, the majority are cutting ties with their old entertainment boxes.
- Content Diversification: CTV allows users to access worldwide content like TV series and movies to independent films in multiple languages. This is also furthering the growth of CTV.
- User Experience: Various flexibilities have been offered to users to opt for it, namely voice search, personalized content recommendations, a user-friendly interface in the ad ecosystem, and even accessing social media apps, which makes it more convenient for the users.
Why is CTV attractive to Advertisers?
- Targeted Outreach: Advertisers can use device IDs or IP addresses to target specific audiences at the household level with CTV while protecting their privacy.
- Increased Audience Engagement and Reach: CTV ads offers marketers the chance to connect with a large audience and generate outcomes.
- Interactive and Customisable Ads:Clickable elements, shoppable features, and integrated polls are examples of interactive ad formats that promote audience engagement. Additionally, based on audience preferences, advertisers can create customized ads.
- First-Party Data and Real-Time Optimization: Advertisers receive first-party data from CTV ads, which distribute appropriate ads without depending on third-party cookies. Additionally, real-time campaign data tracking helps in video advertising to maximize the effectiveness of CTV ads.
- Ad-supported streaming models: Advertisers can now target premium audiences that were previously unreachable through traditional ad models. As more consumers choose video advertising-based video on demand (AVOD) services, CTV’s reach continues to grow, making this trend especially noteworthy.
The Evolution of CTV: Past Growth and Future Projections
Ad spend:
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- Connected TV is exponentially becoming the fastest-growing Ad channel in the US
- Expected to increase by 22% and reach around $28 billion in ad spend by 2024
- CTV Ad spend reached $24.6 billion in 2023 for us and is expected to touch $44 billion by around 2028
- Connected TV is exponentially becoming the fastest-growing Ad channel in the US
- The CTV advertising market in Europe is standing strong at €2.77 billion in 2024 at 5% annual growth rate
CTV vs. linear TV:
- CTV will account for one-third of combined US linear and CTV ad spend this year, from under one-tenth in 2019, per eMarketer survey March 2024 forecast.
- Though CTV ad spending is on rise, we see a significant share ad spending on Linear TV
- Advantages to linear TV are especially during major events like the Olympics, World Cup, and US elections.
- However, most of the live sports coverage is available via CTV
CTV Viewing Time:
- The average user time watched through CTV gradually increasing, and in 2024, U.S. adults will spend an average of 123.4 minutes per day on CTV in 2024, only Mobile devices are ahead with 234 minutes a day
CTV Household Data:
- Around 56.8 million people in the US have already used the connected TVs, and that number is expected to jump to 62.6 million by 2025.
- There are around 123 million households in the US are using streaming services
Conclusion
Connected TV is gradually changing the way people consume video content and how advertisers reach their target audiences. The growth of CTV is due to the changing habits of the young generation and adoption of the internet worldwide. As ad ecosystem streaming models become more popular, CTV will continue to play a crucial role in the future of video advertising.
How Databeat can help you?
At Databeat, we are experts at maximizing the CTV ad ecosystem to provide clients with better outcomes. Our experts are skilled at creating CTV-specific solutions. We have experience resolving issues with many publications, and we can guarantee data-driven, efficient tactics to help you get the most out of your advertising investment.
