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Connected TV Goes Prime Time: Insights From AdWeek’s Webinar

October 17th, 2017   ||    by Melanie Brown   ||    No Comments

How many U.S homes are now equipped with a connected TV device? Unless you guessed over 64 percent, you’d be wrong. This is a massive jump over the last few years, especially for such a relatively new technology.

On October 5, The Trade Desk’s Bennett Crumbling, Freewheel’s Hervé Brunet, and Spark Foundry’s Oleg Korenfeld took part in a webinar hosted by AdWeek to discuss what the TV industry needs to know about connected TV (CTV) moving forward.

What Is Connected TV?

CTV refers to any device used for over-the-top (OTT) video viewing. Brunet divides CTV devices into three categories:

  • Attached Devices (Roku, Apple TV, Amazon Fire TV Stick, Google Chromecast, etc.)
  • Gaming Consoles
  • Smart TVs

Attached devices comprise 84 percent of CTV devices, 11 percent are gaming consoles, and Smart TVs are just 5 percent. CTV inventory is diverse, ranging from Internet-based app content to premium long-form content created for TV.

In 2017, 20 percent of TV viewing—about one hour in the five per day the average person consumes—was done via CTV, a number that’s projected to grow to 40 percent by 2021.

What Are the Benefits?

CTV inventory occupies a unique and valuable position for advertisers. Much of the time, CTV viewing is of premium, episodic content that was developed for television viewing, whether linear or OTT.

When the viewer sits down to watch a program on demand, the ad content is very well-received. Often, it’s a full-screen experience, there’s nothing else detracting from the programming or the ad, and the viewer has chosen to experience that programming. Completion rates for CTV viewing are currently sitting at 98 percent for pre-roll and mid-roll ads.

According to Freewheel’s Video Monetization Report, OTT viewing is growing rapidly. OTT device viewership surpassed that of desktop viewership in 2017 (32 percent to desktop’s 31 percent). If you combine this with set-top box (STB) video-on-demand (VOD), which comes in at 16 percent, OTT viewership comprises nearly 50 percent of viewing.

Crumbling pointed out that CTV’s growth is important to see. For big brands and agencies, being able to target audiences and reach who you want is important. But CTV must also be able to scale closer to traditional TV.

Why Buy It?

If, as an advertiser, you’re only buying linear TV, you’re missing out on a huge audience via CTV. As high as 25–35 percent of consumers are now using CTV as their primary mode of TV consumption. That shift makes a non-CTV strategy akin to not buying one of the three major networks in the 70s, according to Crumbling.

Ad load is tolerated better on CTV than on any other device, which is hugely valuable from a marketing standpoint. After all, 54 percent of viewers don’t mind or actually enjoy the ads they get with their OTT content.

CTV is in a unique position because it’s the best of both the TV and digital worlds. There is a TV-like “lean back” experience with high engagement, which translates to high completion rates, the ability to measure impressions, and high levels of audience targeting.

Who Watches Connected TV?

There has been much talk of cord-cutters and cord-shavers in the TV industry, and CTV is the way to reach them. The much-coveted demographics of both millennials and gen Z are watching CTV almost exclusively. The average age of a CTV viewer is just 31, as opposed to 54 for traditional television.

What’s the Catch?

Of course, CTV is not without its challenges. Complexity when it comes to ad serving and measurement stems from devices having different specs. Additionally, content isn’t always ad-supported, so viewership numbers could be a little off. As with all technological advances, however, adoption comes first—and standardization follows.

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