For years, CTV and linear television have been battling it out for viewership numbers. And it looks like CTV is coming out on top. Seeking more flexibility and lower costs, consumers have cut cords en masse, resulting in CTV viewership surpassing linear.
With ~230 million users in the U.S. alone, CTV offers a clear opportunity for advertisers to reach new audiences. But viewership numbers aren’t the only draw. With an array of results-focused capabilities, CTV has turned television screens into powerful performance advertising engines that brands of today don’t have to go without.
CTV continues to grow in popularity with viewers, and streaming services wisely cater to those customers. But there’s another consumer group they need to keep happy: advertisers. As ad-supported content offerings grow, streaming services and other CTV advertising platforms are developing more sophisticated technologies to meet advertisers’ needs. And though it may not be immediately evident, these technological advances are leading to a better experience for viewers, too.
TV has become a powerful performance channel
Advertisers once used television primarily as an awareness play. This is because viewers used to consistently tune in to their favorite newscast, weekly sitcom or sports broadcast, offering the possibility of reaching millions of eyeballs with one advertisement. But at the same time, this channel was inaccessible for many brands — advertising costs were high and determining when (and even if) an ad would run was difficult, if not outright impossible.
CTV changed this, opening doors to businesses for whom advertising on television had previously been a pipe dream. By providing brands with precision audience targeting, comprehensive reporting and the flexibility to change out ad creative when needed (among other benefits), CTV has transformed television into a performance advertising channel akin to social media and search. And many advertisers are already using it this way.
Studies revealed that while 81% of marketers said they use CTV to raise brand awareness, two-thirds classify it as a performance marketing channel. Additionally, many brands use CTV to drive specific outcomes: over half of respondents said they use the channel specifically to generate measurable web visits, conversions and revenue.
Brands may be using CTV as a performance channel, but some streaming heavyweights have fallen short when it comes to the advertiser-user experience. Netflix suffered when they failed to deliver on advertisement guarantees made when launching their ad-supported tier in late 2022. A year later, Netflix is still working to improve advertisers’ experiences. And they aren’t alone on this front.
CTV adtech is evolving to meet advertisers’ needs
On November 1, 2023, Netflix announced a slew of new features to meet advertisers’ needs better. Beginning in Q1 of 2024, brands who advertise on Netflix can utilize the following:
- Binge ads: An ad format that lets viewers watch a fourth episode ad-free after watching three consecutive ad-supported episodes.
- QR codes: Advertisers can include QR codes in their creative to encourage viewer engagement.
- Sponsorships: Already available to advertisers in the U.S., Netflix’s sponsorships are broken into three categories: title, moment and live. With sponsorships, advertisers can be a part of major content releases (i.e. “titles”), seasonal moments and specific live events.
- Refined measurement: Netflix will partner with third-party providers to expand advertiser measurement capabilities and enable campaign verification.
Netflix isn’t the only one working on this. Paramount also recently refreshed its advertising platform. Their new product Conduit, which aggregates Paramount+ and Pluto TV inventory, was built to address issues associated with CTV fragmentation, like the separation of rival brands in ad blocks and accurately tracking ad running frequency.
“The undercurrent here is that there’s a lot of programmatic technology, and these platforms don’t always play super nice together, and we feel as a publisher the buck stops with us to serve a high-quality ad experience,” said Leo O’Connor, Paramount’s senior vice president of advertising, of the update. “If a viewer gets a bad ad break watching one of our shows, they don’t get upset with the ad server. They don’t get upset with the TV manufacturer.”
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MNTN has revamped its adtech, as well. MNTN Next Gen TV was developed to help advertisers and their teams transform television into an even more powerful growth engine. Some of the major updates include enhanced audience building, verified measurement and optimized creative. Performance optimization also got an overhaul; its dedicated product and engineering teams have upgraded MNTN’s performance engine to deliver an unrivaled return on investment. With MNTN Next Gen TV advertisers are already earning, on average, 27% lower cost per acquisition and 38% more site traffic.
Viewer experiences with streaming ads can be inconsistent
Paramount’s O’Connor isn’t wrong in the assumption that bad ad breaks can reflect poorly on the streaming services serving them. And in the early days of ad-supported streaming tiers, the user experience has been inconsistent at best.
Alyssa Boyle, associate editor at AdExchanger, spoke to this first hand when she reviewed Disney+’s new ad-supported tier in February 2023.
“Whether I was watching ‘Hannah Montana’ or the National Geographic show ‘Airport Security’ about cocaine smuggling, the ad experience was pretty much the same,” Boyle said.
She also noted that ad repeats and those of rival brands weren’t uncommon.
“I saw repeat ads from Capital One and a university in Southern New Hampshire, as well as ads for both Huggies and Pampers in back-to-back episodes of ‘The Simpsons.’”
But a better ad-viewing experience could be on its way. In supporting the needs of advertisers, those updates to ad technology could, in turn, address (if not solve) the needs of viewers. For instance, enhanced audience building will help advertisers be more precise about who they serve ads to, ensuring that they consistently target viewers interested in and/or who could benefit from their product. For viewers, this means more ads that are actually relevant to their interests and needs — and fewer that aren’t.
Evolving CTV adtech could signal good things for advertisers and viewers alike
The ongoing rise of ad-supported streaming content paired with the performance capabilities of CTV should be reason enough for advertisers to invest in the channel. If not, the recent CTV adtech updates are helping to solidify the argument. Increasingly sophisticated advertising technologies will allow advertisers to produce top performance results and tap into CTV’s full potential, but they can also make for a better viewing experience — a win for CTV advertisers and users alike.
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