Uncharted CTVs: The evolving Landscape of TV advertising

April 28, 2022
Jump to...

    For the longest time, cable was advertisers’ golden ticket into the homes of potential customers. The advertisements placed in between prime time shows were so ingrained in us, that they became a part of popular culture. But that era is quickly coming to an end. While that shift in the paradigm might scare some marketers, the less expensive alternative of CTV is on the rise. With many jobs shifting to mainly working from home or partially remote, the largest digital display in a household is getting more screen time. Many people are cutting the cord completely, instead opting to subscribe to multiple streaming services that offer the shows they want to watch, when they want to watch. This fully digital format allows for easier gathering of data and more accurate targeting.


    Moving upstream

    Streaming is on track to become the fastest growing video format, both in viewership and media investment. Americans are continuing to cut the cord on their cable subscriptions at a rate of 4-5% per year. In fact,Tubi’s 2022 State of Streaming Report¹ projects that in two years, less than half of US TV watchers are expected to have cable or satellite TV. More people are finding it more affordable to pay the miniscule subscription rates for these streaming services compared to having to be locked into a contract for a cable service. According to the same report, CTV and OTT ad spend grew 34% in 2021 but only 7.4% for national broadcast and cable. A study performed by Strategy Analytics² has found that if current trends continue, more than half of all households worldwide will own a smart TV by 2026. This study also reports that the United States household market alone has already surpassed an 80% saturation rate, with 82% of US households having a CTV/streaming device, as compared to the 80% in 2020, and 74% in 2019. With nearly 50 different streaming services to choose from in North America alone, it isn’t surprising that smart TVs with apps for these streaming services are becoming exceedingly popular.

    Of course, working from home has obviously accelerated this. With more people staying home for work, the TV is getting more attention. Whether it’s for music, background noise, or just a little quick distraction, CTV has been steadily increasing in viewing hours since the beginning of 2020. Nielsen³ studies revealed that the time users spend on their CTV devices increased by 81% year-over-year since 2019. Meaning that CTV viewing has increased to around 4 billion hours per week. This is compared to cable which has kept about the same amount of viewing hours, but has dropped in number of viewers.


    Cable is as stale as Cookies

    So cable is obviously going the way of VHS, DVD, and Blockbuster. But how does this shift benefit marketers? Let’s start off by talking about cookies. By now, most people are aware that they’re eventually going away, so first-party data becomes more important to advertisers’ success. With streaming becoming more popular, consumer’s desktops aren’t the biggest screens you can gather this data from anymore. The good news is that the first-party data you’re working on collecting can easily be extended to CTV. CRM tools allow you to reach your target audiences on CTV and deliver personalized or individualized messages. These tools allow you to create various segments from your first-party data pool, so you can tailor your message to a cart abandoner versus a loyal customer. Not to mention that data from your onsite pixel can be used to  target and similarly segment consumers, creating a nuanced and highly-actionable audience for your business. You can even reach each target audience within the premium content they are watching on the largest screen in the house.

    Being able to properly segment and target your audiences accurately was never really that feasible with traditional cable. As identity marketing tools become more sophisticated, marketers can now better target specific audiences, even within CTV and video environments, via more relevant advertising. Copying identity targeting techniques originally used for cable and adapting them to CTV will help marketers standardize and tap into first-party data unavailable to them before. This will lead to a better contextual experience for CTV consumers with ads better aligned with what audiences are already watching. Personalisation, powered by interactive and immersive experiences, is an important aspect to this segmentation of audiences. Making sure that you know the audience you’re targeting is extremely important. For example, if a viewer is highly interested in cooking shows, serving an ad for kitchenware or products right after would definitely increase advertising effectiveness.

    In addition to being hard to target, most cable services now offer DVR service, which permits a viewer to fast forward through the advertisements. The consumption of live television has declined and so have the chances of viewers seeing traditional television ads. CTV advertisements can’t be skipped in most cases, giving advertisers a greater chance of their audience actually watching their ads. For this reason, CTV video ad completion rates are very high. CTV content also has the luxury of being able to be viewed completely on the viewer’s schedule, which adds to the appeal. This also gives advertisers an upper hand not having to worry about which time slot they’ll fit into to be viewed by a certain demographic as they would with cable.


    Connect better with Connected TV

    Even better, are the statistics surrounding CTV advertisements. A recent survey from Magnite Research4 had half of respondents agree with the statement: “TV ads are an important part of my TV watching experience”. Another 62% of respondents expressed that they had discovered new products as a result of watching ads through streaming services. Despite the mass exodus from traditional cable, advertisements aren’t the issue. Many people still enjoy interacting with them and are willing to sit through a few advertisements to avoid paying a higher, or no subscription fee for streaming.

    Marketing and advertising over cable has become costly and irrelevant (for the most part) with the rise of CTV. Most people are switching over to streaming services and advertisers and marketers should as well. Being able to identify users at a more granular level and target specific audiences within niche markets is a cornerstone of CTV, something that cable could never provide. Making sure that you’re gathering all the proper, accurate and relevant first-party data is extremely important if you want to correctly identify your audiences. Fortunately, Stirista has a solution for all of this. Being able to run omnichannel campaigns that not only cover all your bases on CTV, email, social media, and display. Making sure that your audience is getting targeted messages at the right time, on time!


    At Stirista, Identity is our Identity, and we have a simple mission: help marketers generate revenue with our identity-level data. As marketers ourselves, we know that one-size-fits-all solutions and decayed data don’t work, so we built our modular and real-time OMNA Identity Graph from the ground up to arm you with marketing data that actually works.