Will CTV Advertising Take Over Mobile in 2019?

Marketing advisors are already calling Connected TV the future of video advertising. However, statistics illustrate that it’s the dominating channel of today, already! Anna Kuzmenko, Fiksu COO shared some valuable insights about the industry. Learn the true potential of the environment.

Half a century ago, no one would expect that television would take over the world. However, by 1959, 80% of US households had access to black and white TV, and in 1982 the same share had already been watching it in color.

In 2019, technology changes the way people watch TV again.

TV: Gen-Z?

Today, it’s not TV manufacturers but modern individuals who define the vector of technology development and media consumption. A studyOpens a new window by Pew Research Center showsOpens a new window that 45% of all representatives of the so-called generation Z are online almost constantly. For millennials, watching TV means streaming content through their internet-connected devices to home screens.

Considering the ever-growing rise in consumption trends, in 2018 alone advertisers spent an average of $14.2 million on digital video, compared to $12.1 million in 2017. Last year, brands spent around $7.1 million to create original video content in particular. On the other hand, brands are going to increase the budgets for digital video by more than 25% and up to $18 million. More than half of this budget — $9.3 million, will be allocated to create original content.

With this in mind, it’s even more important to consider the new media channel that changes the way we reach audiences with our ads — the Connected TV, or CTV.​​​​​​

Also Read: Discovering New Ways of Mobile Advertising with TikTokOpens a new window

Connected TV: The Next Big Thing for Advertisers, or Outpacing Mobile in the Global Race

The CTV device is represented by a hybrid of digital media player and microconsole with an internet connection. It can be your Smart TV, streaming set-top boxes like Tivo and Roku, or video game consoles. By using connected TV devices, viewers can access video streaming services (Netflix, Hulu, YouTube, Pandora) and search for digital content on the web.

The streaming services mentioned above can be reached via mobile as well, but the figures indicate it’s not the most popular choice. According to official stats by Hulu, 78% of their audienceOpens a new window enjoy content in their living rooms on connected TVs. As confessed by Cindy Holland, the VP of original content at Netflix for their platform it’s pretty much the same. The most part of their viewing experience happens on CTV rather than mobile.

In 2018, CTV surged ahead mobile in trends capturing the biggest portion of impressions and video completion rates among all devices as stated in the Extreme Reach Video Benchmarks 2018 Report.

The VCR for CTV devices remains very high at the astounding 90%. And as for impressions, mobile video ads are at their lowest since Q1 2017. Mobile holds only the second-highest rank at 25% in the first quarter. Meanwhile, CTV keeps 49% of all the impressions among devices over the Q1 2019 — which is nearly double the mobile long-form ads performance.

Last November, video-first SSP Beachfront reported that ad requests for CTV had increased by a whopping 1,64% from November 2017, now reaching 30 billion requests. The reason behind that? CTV brings marketers the advantages of programmatic-to-TV advertising, connecting them with a highly engaged audience any place, any time.

Traditional TV advertising has its huge audience coverage already, but it is not always effective since it’s not targeted. As on CTV, where the viewer is the one who selects the desired content, success rates are much higher. CTV advertising campaigns target consumers by interest, relying on GEO data, demography, income levels and many other specific metrics, having a user consequently paying more attention to relevant CTV advertisements. Better viewability brings an appealing opportunity to reach a more engaged and valuable audience. According to a study conducted by Magna Global and Roku, adding just one CTV ad to your usual traditional television ad campaign will increase the likelihood of response and ad recall by 34%.

Also Read: Line It Up: Use Display and Native AD Targeting Tactics to Hit Your Business GoalsOpens a new window

CTV for the New TV

The reasons behind the success of CTV are numerous, but here’s why it’s especially lucrative:

1. CTV audience is unique.
 

The core (53%) of the CTV audience is aged 25-44, which is perhaps the most interesting and widespread target audience for many products. It is a wealthier and more intelligent tech-savvy audience (+25% of the audience are people with incomes above average).

2. It is the media for millenials.
 

Nobody can argue that Netflix, Amazon, Youtube and Hulu are the go-to platforms for millennials. With growth of demand for OOT, Connected TVs are becoming the primary source to reach these services due to their benefits in terms of video quality and wide screens. 67% of today’s cord-cutters prefer to go CTV-only, even willing to share their personal data in favor of a more tailored experience.

3. People are fine with CTV ads.
 

With all its benefits CTV cuts the cost for viewers compared to traditional TV. The viewers seem to realize this fact and are willing to accept ads in exchange for premium-quality content at low cost. Besides, they deem CTV ads as “less annoying”. Since users personally choose interesting content for themselves, they are less likely to lose focus and look at their smartphone or tablet. Screen shifting is also minimized, and an impressive 95% of users end up watching CTV ads to the end.

4. You get the broader reach.
 

By 2020, up to 75% of households will be using connected TV in the US. In addition, CTV is watched by families, so the average number of people viewing content on CTV is 2-3 people. Respectively, the number of viewers proportionally increases by this number.

5. Impressive Ad Recall.
 

CTV beats the banner blindness problem, making viewers remember the ads seen on big HD screens much better. That is 34% better, to be precise. With the growth of CTV audience, this factor is going to play a major role in marketing campaigns.

Also Read: Why Fintech is the Next Ad Industry Disruptor: Creating Offline Transaction-Based AdvertisingOpens a new window

The Bottom Line?

Connected TV delivers a symbiosis of TV and online video advertising, taking the best from each type. While CTV is similar to the linear TV experience, there is a much higher ability to target audiences based on the data these apps provide. Besides, viewing content through CTV is often less expensive for viewers than traditional TV.

CTV allows for more cross-platform data and better targeting opportunities, resulting in higher conversion for marketers. With decreased banner blindness, improved ad recall rate and millennial cord-cutter audiences, it outperforms all existing ad environments, leaving aside even mobile.

First come first served — TV will never be the same, so it’s prime time to take advantage of the new media.