Over the past decade we’ve experienced an explosion of streaming entertainment options, and consumers embraced it. The pandemic of 2020 expedited the already growing adoption of CTV. And then big players like Netflix and Apple TV invested in new original content prompting a significant shift in preferences away from traditional TV, making CTV a mainstream media channel that’s here to stay. Continue reading for three trends that are helping to shape the future of CTV.
FASTS and AVODS are Outpacing SVOD
With the abundance of streaming options, and tighter household budgets FAST streaming (Free, ad-supported streaming,) and AVOD (advertising video on demand,) are surpassing SVOD (subscription video on demand,) service usage. Netflix, Disney+, and Amazon Prime Video have added new ad-supported tiers to their platforms over the last two years, shifting their priorities to profitability through ad sales. This is because streaming services are approaching a critical saturation point. Currently, Over 90% percent of American adults access streaming video platforms, making it challenging to identify and attract new or untapped subscribers. Consequently, the ad-supported tiers are gaining traction, proving that consumers appreciate the flexibility and the value that comes along with less expensive options, even if there are ads.
Exponential Growth for Political Advertising on CTV
Political advertising, which traditionally has relied on linear tv to reach target audiences, is set for exponential growth on CTV. A recent report from Insider Intelligence found that political advertising is estimated to reach $12 billion this election cycle, up 29% from the 2020 election. CTV political ad spend growth in particular is projected to increase over 500% between 2020 and 2024 and make up almost 50% of all digital advertising spend. In comparison, during the 2020 election, CTV spend made up only 19% of digital spending. This does not come as a surprise as in 2020 only 26% of US homes were cord cutters. That percentage has doubled to 52% of US households today. With CTV now central to political ad strategies, political advertisers can leverage data to provide personalized ad experiences for their target audience. This could potentially affect inventory and rates for other advertisers during election cycles, similar to what traditional TV and Radio have experienced in the past.
CTV Ads are Becoming More Interactive
Disney recently announced two new ad units, advergames and shoppable ads. These units aim to enhance measurability to CTV, through increased engagement and conversion. The advergame units currently available are a quiz format and a beat the block format where users participate with their remotes. The inaugural beat the block campaign launched with Top Golf as a sponsor. Using their remotes as a club, viewers shoot golf balls into specific targets. The shoppable formats allow viewers to scan QR codes to be directed to the advertiser’s website for purchase. Other platforms have already integrated shoppable ads, as well as other interactive CTV formats like overlays, carousels and choose your own commercials, and these are only some of the interactive options available. These innovations are rapidly transforming the world of television advertising, which has been limited to standard video in its linear format. As streaming services continue to introduce new ad experiences, we can expect even more innovation in this space, innovations that were never possible in the traditional, linear programming of the past.
Growth of CTV usage will persist as platforms continue to prioritize profitability through ad revenue, making it more available to a wider user base. Reach out to Jigsaw for a consultation.
