The explosive growth of Connected TV or CTV adspend is attracting new players and Unruly’s Lee Smith looks at how this will impact the issues of content, services and technology for the platform.
2021 was a record year in terms of ad spending and 2022 is set to witness even more growth, with the global ad market forecast to exceed over US$700 billion. Time spent watching videos is at an all-time high and it is no surprise that a significant bulk of ad dollars has been spent on video advertising – a trajectory that will make further gains in the year to come.
How then can brands and advertisers continue to leverage this growth, and stay ahead of the game amid ever-evolving consumer preferences?
Emerging channels and the growth of CTV
The world is experiencing a massive paradigm shift in the way content is consumed and Connected TV (CTV) is perhaps one of the platforms that has gained the most popularity since the start of the pandemic. As the largest screen in the household, CTV provides prime advertising real estate with plenty of avenues that advertisers can leverage, such as scalable and premium qualities, unskippable content and creative formats.
In fact, CTV adspend has grown so exponentially that even the forecasters can’t keep up. Insider Intelligence shared that last October, it raised its 2022 US CTV ad spend forecast from US$17.44 billion to US$19.10 billion. As brands begin to see the need for highly personalised and targeted content free of third-party cookies, CTV – a cookieless environment – is set to grow further in all markets.
This thriving demand for CTV on both the advertiser and audience fronts will see adtech partners evolve to provide enhancements to the measurement, data and delivery of supply. Besides the expansion of services through innovation and end-to-end solutioning, the industry is also set to witness more partnerships and acquisitions as companies join forces and leverage each other's unique capabilities.
The majority of buyers (84%) who are increasing spend on CTV cited consumer privacy as the reason for their increases and this trend will continue to grow in 2022. The influx of new players in CTV will push the industry to relook at identifiers and how buying across different systems and/or walled gardens can be made more seamless.
Sophisticated contextual targeting and the cookieless future
With increased privacy regulation and needs, there has been a newfound focus on targeting solutions that are free from third party cookies and personally identifiable data.
As contextual targeting tools become more sophisticated, marketers can now better connect with audiences, even within CTV and video environments, via more relevant advertising. Mirroring contextual targeting on linear TV and programmatic display, standardisation and new technologies that tap on publisher-direct data will see CTV and video inventory packaged into bundles, based on content-level attributes such as genre and rating, that will enable programmatic scalable buying opportunities.
This will supercharge the contextual experience for CTV, and video and ads will be better aligned with what audiences are already watching. For example, if a viewer is highly interested in cooking programmes, serving an ad for kitchenware or products right after would definitely increase advertising effectiveness.
The use of Automatic Content Recognition (ACR) data is another emerging example of how data can be harnessed to target audiences more accurately in a GDPR-compliant manner. ACR data, which identifies the content and ads being watched on a CTV, can help marketers better understand consumers’ viewing habits.
Being fully opt-in and completely free from cookies, the key benefit of the collection and analysis of ACR data is consumer privacy. With the massive boom of smart TV across the globe, the scale of deterministic household data that ACR data can provide is invaluable.
Can I get your attention please? The creative comeback
It is no secret that creative remains a key element in driving advertising success. In fact, a Nielsen study found that creative is responsible for a whopping 47% in advertising sales uptick. As consumers become increasingly digital-confident, evolving habits will challenge standard video practices, especially with emerging channels such as CTV and its unique properties.
To keep up with the changes, data-driven creative will become increasingly important in helping brands resonate with audiences on a deeper and more meaningful level. For brands to fully stand out, they need to start leveraging content-testing tools in their marketing mix. With these tools becoming more sophisticated, consumer responses to video campaigns can be better measured and analysed, removing most of the guesswork, and the relevant optimisations can be performed to maximise the impact of their content across multiple screens.
Understanding metrics, such as emotional engagement, purchase intent and brand favourability, will be especially useful in deciphering ever-changing consumer trends across different demographics and cultures, as seen in our recent analysis of 2021 Christmas ads across the globe.
Make buying easier and fun
Since the emergence of the pandemic, 70 million more people have turned into avid online shoppers in Southeast Asia. As consumers – even the older generation – become more familiar with the digital world, viewers are drawn to seamless, efficient and helpful ads that provide utility. With tons of brands already seeing direct purchase from shoppable ads being the new “click-through rate”, how can the path to purchase be made even shorter and more convenient?
For one, QR codes, which have recently re-emerged, provide a quick-buying solution, especially for CTV as most consumers already practise “second screening” – using a mobile device while watching a television screen. A click-out feature can even allow consumers to scan a QR code and have the products instantly added to their shopping carts, thus offering a quick and seamless e-commerce experience.
Personalisation, powered by interactive and immersive experiences, will also take off within video-led environments as new fuss-free technologies emerge and consumers are familiarised with the once-novel technologies. Think audience-led customisation on the biggest screen in the house, where consumers can select product colours and designs, and play around with different combinations as they interact with a brand’s products – offering a larger-than-life digital retail experience through CTV.
Taking this to the next step beyond interactive to become immersive, next-gen video, virtual and augmented technology will push the parameters of exploring new narratives and facilitating experiences in multisensory ways. Imagine a 360-video experience paired with 8D audio that transports consumers right into a brand’s environment, taking over their senses and imagination. Or a virtual world where consumers can interact with branded environments and other humans through their personalised avatars, blurring the lines between the virtual and physical worlds.
Today, consumers are watching video on all screens, from their mobile phones to their tablets and TV. Brands need to be where consumers are, especially within the growing CTV space – a standout within the already flourishing video market. Advances in technology will continue to allow marketers an expanded toolkit to engage their audiences, leveraging video for its breath-taking storytelling and engaging capabilities, and also add to its capacity to meet fast-changing consumer demand.
Getting consumers to click play is simply a first but crucial step to succeeding in the year ahead. Advertisers and publishers need to be at the forefront by harnessing the latest technologies and growing formats to get consumer attention and make the buying experience easy and fun. Leveraging data-driven insights and metrics – which are now available at our fingertips – is a good place to start.