Leslie By 2023, connected TV (CTV) had emerged as a growing force, despite challenging economic times, particularly with price inflation. According to MNTN, CTV’s global advertising revenues were expected to have reached $25.9 billion, marking a significant 13.2% increase over 2022. In addition, CTV recorded an 82% attention rate for its ads, surpassing linear TV’s 69%, indicating greater viewer engagement with the format.
For 23 years, connected TV had lagged behind linear TV. It was only then that it fully asserted its dominance in the TV environment. Connected TV stood out from the crowd, offering advertisers a wide range of benefits. In 2022, according to a GroupM report, this technology accounted for $17 billion in advertising investment worldwide. At that time, connected TV was gaining momentum, but questions were being raised about how it was impacting the advertising industry.
Let’s take a moment to understand the beginnings of connected TV:
Globally, connected television (CTV) is experiencing impressive growth. CTV ad spending in the U.S. is forecast to double by 2026, reaching $43.59 billion. This is supported by an increase in streaming time, with US residents now spending over an hour and a half a day on OTT devices. In Europe, Germany and the UK stand out with 43 and 42 million monthly CTV users respectively, while Brazil is a leader outside the US with 89 million users.
But what is CTV referring to?
CTV refers to smart TVs connected to the Internet, independent of channels or boxes. Connected TV offers users a wide range of online services such as streaming platforms, video-on-demand applications and social networks.
These services are accessible via so-called OTT (Over The Top) applications :
– SVOD (Subscription Video on Demand), which requires a paid subscription, such as Netflix, Disney+, OCS and Prime Video.
– AVOD (Advertising Video on Demand), which offers free content in return for viewing advertisements, such as Youtube, RakutenTV and PlutoTV.
– TV channel replay, such as CNN Go (America), BBC iPlayer (England) etc...
These OTT applications are available on different devices such as tablets, mobiles, televisions and computers, making it easy to access content at any time. This technology has opened up new possibilities for advertisers and consumers alike:
One of its main benefits for advertisers is the ability to offer advertising tailored to specific market segments, resulting in more effective delivery and a higher return on investment. This targeted approach will enable them to avoid wasting advertising resources by directly addressing the consumers, most likely to be interested in their products or services. Globally, connected television (CTV) is experiencing impressive growth. For example, CTV ad spending in the U.S. is set to double by 2026, reaching $43.59 billion. This is supported by an increase in streaming time, with US residents now spending over an hour and a half a day on OTT devices. In Europe, Germany and the UK stand out with 43 and 42 million monthly CTV users respectively, while Brazil is a leader outside the U.S. with 89 million users.
What’s the difference between linear and non-linear TV?
Graph: linaer TV and VOD usage in the US market
But what’s the difference between the two?
In the chart above, 90.30% of households are equipped with non-segmented TV. It offers unique, non-personalized, easy-to-view content. On the other hand, only 25% of households opt for segmented TV, i.e. they accept targeted advertising during their programs.
Segmented TV ads target households thanks to operators, who have access to socio-demographic, geographic, consumption profile and TV data, etc. With this data, advertisers can propose personalized advertising campaigns based on user profiles.
What about non-linear TV?
Non-linear TV encompasses connected TV and replay. It offers a flexible, personalized TV experience. Indeed, as mentioned above, connected TV is accessible via devices such as Smart TVs, Apple TVs, box sets and games consoles. According to the graph, it is adopted by 84% of households. What’s more, it’s interesting to note that 77.1% of users prefer to use replay on their Smart TV to watch their favorite programs. Advertisers can therefore benefit from investing in connected TV to increase their visibility, as it is a fast-growing medium.
But what does this have to do with CTV?
In 2022, connected TV will account for 172 million euros in revenues in France, an increase of +20% compared to 2021, compared to just 18 million euros in revenues for segmented TV. CTV will continue to experience significant growth, which should continue into 2023. According to SRI, revenues from this medium are expected to increase by 32%.
According to the latest statistics, some 5.4 billion people worldwide are connected to the Internet, representing 67% of the world’s population. This widespread use of the Internet is unevenly distributed, with penetration rates as high as 98% in Northern Europe and 94% in Western Europe. In North America, 93% of adults are Internet users. Furthermore, the trend towards digitization and online connectivity is underlined by the exponential growth in Internet traffic, which in 2020 was some 92 times greater than in 2005. With this expansion of the Internet, video streaming platforms, such as SVOD and AVOD services, are experiencing rapid growth. eMarketer predicts that the number of subscribers to these OTT services will reach 2 billion by 2024, offering significant advertising and commercial opportunities worldwide.
To support you, Admo.tv launched its VOD campaign measurement solution this year. Called Adconnect, it will enable you to assess the impact of your campaigns and their complementarity with your traditional TV campaigns. For more information, please contact us via this form.
If you’re interested in this subject, have a look on our next article on trends in connected TV.
