Connected TV Advertising Investment is growing at triple digit figures in 2020. Yet, the level of investment is nowhere near the CTV audience number, which is already larger than that of Pay-TV. Media buyers at Starcom USA and GroupM tell Portada that better reporting and more sophisticated measurement options are key to further growth.
“The shifts in media properties were in some ways, driven by the audience’s shifts in consumption. More streaming options were considered, and more eCommerce partners were rotated in, ” David Queamante, SVP, Client Business Partner, UM and responsible for developing and implementing the national media strategy for Quicken Loans, tells Portada.
CTV Advertising Investment is Skyrocketing…
- Roku, which is turning into something like the “cable box” of streaming TV, last week announced that Roku’s Platform business – which includes advertising and content distribution revenue – saw its strongest quarter in the segment’s history, with revenue leaping 78% YOY to US $319 million. Roku attributed the record numbers to strong growth in advertising as brands embraced connected TV advertising platforms, and the number of first-time advertisers more than doubled in Q3.
- Demand side platform The Trade Desk reported in its Q3 earnings that programmatic CTV ad investment on its platform grew by 100% YoY, substantially helping overall revenues to increase from US $164 million to US $216 million in the third quarter of this year.
- Magnite a sell-side ad platform that encompasses Rubicon Project and Telaria, announced last week that CTV ad revenue was up 51% year over year to US $11.1 million.
- Regarding ad impressions, according to the latest report from omni channel advertising platform Innovid, CTV ad impressions grew 55% year-over-year from 2019 for the third quarter.
… but in 2021 CTV Advertising Investment will still only amount to 15% of Total TV Advertising …
“We analyze audience trends and are seeing that audiences continue to move to CTV platforms. This trend has been occurring steadily for the past few years, but has increased exponentially with the pandemic as people stay home more and seek out new content,” says Darcy Bowe, SVP, Media Director at Starcom USA in Chicago. “With increased CTV viewership, and the continued decrease of linear viewership, it is important that we evolve our media plans to follow people where they are watching content – and in turn, where they are more likely to see our clients’ ads,” Bowe adds.
CTV household penetration is lies at 80% and Pay-TV’s at 62%.
In fact, in 2020 the number of CTV households has become substantially larger than the number of PTV households. US. CTV household penetration is currently approximately 80% , while pay-TV (cable and satellite) penetration lies at 62%. Of course, this has led to a surge in CTV advertising investment, because ad dollars chase eyeballs. Still, even taking into account the current high growth rate, EMarketer estimates CTV ad spending will reach US $10.81 billion in the US in 2021 – up 56% from two years earlier, and representing around 15% of total US TV ad spending. This makes little sense when you consider that U.S. consumers watch more CTV than PTV.
Despite the high growth rate, CTV ad spending is expected to only represent 15% of total U.S. TV ad spending in 2021.
… and Media Buyers Ask for Improved Reporting and Measurement
One of the reasons CTV advertising investment is not growing at an even higher rate is that the inventory is fragmented, making it difficult to measure and plan. Ad fraud and frequency capping are other serious concerns. Advertisers often do not get the same level of reporting in their CTV campaigns compared with linear TV as CTV reporting often centers around ad-impressions. “When you do a TV buy, you know the pod position you’re in, you know the time your commercial ran, you know the show, you know the content of the show, which episode number it is. We need that same level of detail that we’re accustomed to,” Jessica Brown, director of digital investment at WPP’s GroupM, recently told Beet.TV.
Starcom’s Bowe adds that “more sophisticated measurement options are key – and that will allow us to measure viewership and frequency across screens more easily. It’s important to understand when a person sees our ads across Linear TV and CTV, let alone across all screens. However, we are already starting to see the impact of co-view measurement in our media plans as we’re able to understand the total number of impressions CTV campaigns are delivering vs. relying on the number of ads served as a proxy for impressions.”
We are starting to see the impact of co-view measurement in our media plans as we’re able to understand the total number of impressions CTV campaigns are delivering vs. relying on the number of ads served as a proxy for impressions.