Connected TV offers advertisers born and raised on digital a highly targeted and cost-effective way into a medium proven to build brand equity.

Connected TV (CTV) advertising in the UK is full of promise, with first movers actively investigating how they can invest more budget into internet-enabled, data-driven, targeted digital television campaigns.

Research carried out by Xandr and IAB Europe, among advertisers, agencies and trading desks, shows that nearly nine in ten (86%) are due to increase investment in CTV within the next 18 to 24 months. Of those planning to invest more, nearly half (47%) are aiming to increase budgets in excess of 30%.

The key driver behind this planned investment is targeting efficiencies (58%) as well as the ability to deliver TV advertising at scale (44%) and gain data insights (36%).

So, against a legacy of linear TV providing mass reach but with a typically high cost of creative, little addressability and virtually no data, the promise of CTV is clearly beginning to gain traction. Those involved in planning and buying digital television campaigns now need to look at how they can deploy data-driven, precision targeting strategies to reach customers and prospects enjoying premium content on a household’s biggest screen, and with the bonus of near real-time data and enhanced campaign measurement.

Education is vital

For a nascent channel, like any other, there is always going to be some early adoption challenges. The research revealed that a death of supply is seen as the top barrier to entry (57%) as well as a lack of understanding in an ecosystem awash with acronyms (41%).

With a wide choice of platforms there is not only an array of potentially confusing terms describing each individual route to market, but with inventory divided between so many ‘walled gardens’, it can also be difficult to scale campaigns. And gaining access to sufficient spots to replicate the reach of traditional television is virtually impossible.

Even though half of the market (51%) claims to understand CTV, it is clear the industry must work together to improve both access to inventory and education. There is clearly a desire for a deeper understanding of how CTV operates within the wider ecosystem across multiple devices and platforms. All companies in the sector have a role to play in educating customers and prospects so they can feel more comfortable in progressing the promise of CTV to actively invest in budget.

Targeting the right audience

Identification on linear TV is a major issue because there are no cookies or mobile device identifiers to determine who the viewer of an advert is. The industry lacks a consistent identification technology that works across multiple platforms and protects user privacy. This makes it difficult to plan cross-channel campaigns, as well as apply frequency capping limits.

CTV offers advertisers born and raised on digital a highly-targeted and cost-effective way into a medium proven to build brand equity. It enables greater granularity in reaching audiences at different stages in their purchase journey and the ability to flexibly target specific content categories and demographics.

Brands can plan and buy a campaign with a technology vendor that has a direct relationship with customers and is therefore rich in first-party data. This means advertisers can target more effectively and efficiently to reach their target audience in the right context, in terms of where the person is likely to be in the buying cycle, which content is being consumed, where and at what time of day.

Advertisers can also review the performance of campaigns in near real-time so they can be fine-tuned. And later on, gain further insights from examining post campaign data to improve the effectiveness of future activity.

Keeping pace with viewing habits

This constant re-evaluation from new insights is especially important at a time when consumer viewing habits are fast-changing. With the coronavirus pandemic supercharging an already strong drive towards streaming services, users are now spending more time watching video than ever before, across varied devices, even as traditional television viewership declines.

In the UK alone, 47% of households own a smart TV in 2019, according to Ofcom, and over-the-top (OTT) services are on the rise. The past year alone has seen the launches of Apple TV+, BritBox and Disney+ enter the market.

Finding and reaching the right audiences in this ever-fragmenting space will be more important than ever – and that’s particularly true of the home’s biggest, shared screen. It’s why it is so vital we educate advertisers on the data-driven television opportunities that are now opening up, so they are primed to make the switch from linear to digital and start benefiting from precision targeting and enhanced measurement.