More than half of US households now have access to Connected TV (CTV). It’s no surprise that CTV advertising is growing as well. 1.7 billion CTV ad calls a month in 2017 transformed into 29.9 billion ad requests in 2018. The growth of high-speed internet made CTV a reality. The emergence of 5G technology will only accelerate that growth.
It is opening up new opportunities for marketers and consumers. CTV is ushering in an era of immersive viewing and hyper-personalization beyond anything we’ve seen before.
Innovation With Connected TV Advertising
Digital marketers have developed highly-efficient profiles on their target consumers. With millions of data points about online behavior, purchases, email open rates, and conversions, marketers can optimize their online media buys to deliver incredibly relevant content.
By contrast, television has always been a mass medium designed to reach large audiences. While effective at delivering large numbers, it has been less effective at delivering niche audiences. Automating TV advertising with first-party data is allowing CTV to zero in on that niche. It changes the equation from a one-to-many delivery system to a one-to-one experience.
Cadbury nailed this one-on-one approach with an online ad that leveraged data to incorporate personal touches. By drawing on images on social media, it was able to incorporate the consumer’s personal family photos into the background of the setting and ended with a personal message. CTV makes the delivery of such ads possible on television.
Advertising has always been an interruption to whatever medium in which it’s been placed. Relevant advertising, however, is seen as less intrusive. If you’re not in the market for a new car, an auto ad may feel like an annoyance. If you’re actively in the market, an ad for zero rate financing or deep discounts on the model you’re looking at is important information.
Delivering this level of personalization is proving effective. 80% of consumers say they are more likely to make a purchase when marketing is personalized and relevant.
The Ultimate In Hyper-Personalization
Marketers are already experimenting with powerful CTV tactics.
A trailer for 20th Century Fox’s movie Alien urged viewers to flee the coming aliens before it was too late. Some viewers were shocked when they were called by name in the trailer and told to run. Addressable IP delivery, targeted to customer logins, made this work. While it unsettled some viewers, there’s no doubt it created a social buzz that transcends regular ads.
As CTV continues to evolve, AI will power voice and visual content incorporating ad tech that supports hyper-personalization. Imagine videos that talk to you personally and present offers that are relevant to you.
Another movie ad might have the actors addressing you by name, letting you know that this is a family-friendly movie that’s it’s OK to take your grandchild to, invite you to come and see the debut at the theatre down the street, and offer you a discount on your favorite candy – the one you buy each time you visit the theatre. Graphic processing, AI, Augmented Reality, and Mixed Reality will make it possible.
What’s still evolving is standards in the CTV space. There’s a demonstrated need for more control and visibility of campaign performance, including measurement, tracking, and attribution.
Right now, placing CTV ads can seem complex. There are many proprietary systems with their own intricacies. Over time, a standard will emerge to make the buying process more seamless.
The Merging Of SVOD, TVOD, AVOD
As CTV has evolved, content providers have generally fallen into one of three camps:
- SVOD (Subscription Video on Demand)
- TVOD (Transactional Video on Demand)
- AVOD (Advertising-Based Video on Demand)
In the future, we’re likely to see a merging of strategies.
Publishers relying on subscriptions alone may be facing an uphill battle. Netflix, Amazon, and Hulu dominate the playing field now. Yet research shows that 24% of consumers say they already have too many video services. The only way they’d add a new one is to drop an existing one. There appears to be an upper limit for the number of subscriptions.
TVOD is gaining steam and will likely continue to grow. Services such as Patreon that lets anyone develop a direct relationship with consumers and set up subscriptions or transactions are proving successful. AVOD isn’t going away anytime soon. Consumers have grown up understanding that the price of watching high-quality, free content is watching ads.
In the future, look for the growth of hybrid models that supports SVOD & AVOD with some TVOD to become more mainstream. Such an offering might combine a free, ad-driven basic service, a premium ad-free subscription service, and targeted content available on a pay-per-transaction model.
What will Connected TV Advertising be like in 2030? 2050?
It’s almost unimaginable what CTV could look like in 2030 or 2050. There’s no doubt that Connected TV Ads in the future will be even deeper and richer immersive experience. Advertising will no longer feel like an interruption, it will be integrated. Every touchpoint will be trackable and connected. Your behavior will shape the experience and change as your tastes change.
Smart TVs will simply get smarter.
Advertising largely now perceived as an obnoxious act of interrupting your content consumption, or as an attention-seeking sales tactic. This has been a constant coldness between marketers and consumers. Will marketers finally be able to make advertising useful to the end-user?
With technologies like XR – Extended Reality on the horizon, the future is more exciting than ever.
More advanced AI will draw data from every connected device – and every consumer interaction – to construct the right marketing message and distribute it in a truly seamless experience. Machine Learning will continue to refine and optimize what you see.
It’s widely reported that Americans are exposed to between 4,000 and 10,000 advertising messages a day. The sheer volume of ads makes it impossible to see them all and remember them (let alone act on them). CTV promises to transform the advertising experience. It will cut through the clutter of thousands of ads and deliver personally memorable content.