The world of advertising has undergone significant changes since the advent of connected TV. Compared to traditional TV advertising, connected TV advertising has the potential to gather more data to analyze, target specific audiences, and personalize messages.
In the past, TV ads were broadcast to everyone watching the channel, but now, advertisers have the power to show their ads to particular demographics or even directly to certain individuals.
In this blog post, we will discuss emerging connected TV trends that marketers can adopt to stay ahead of the game — and ultimately, improve their ROI.
The Growth and Popularity of Connected TV Advertising
With the shift towards OTT (over-the-top) services and on-demand TV viewing, advertisers are increasingly leveraging connected TV platforms to reach their target audience.
Statistics show that connected TV ownership continues to rise not just in the US, but on a global scale. It’s estimated that there will be 62.6 million connected TV users in the US alone by 2025.
With this significant growth comes an even more significant opportunity for advertisers to reach their target audience through connected TV advertising. In fact, it’s estimated that ad spend growth will increase by almost 20% by 2027.
Connected TV advertising offers advertisers the ability to target their audience based on demographics, interests, and behaviors. They can leverage data and analytics to personalize ads and make them relevant to the user. With the potential for such targeted advertising, advertisers can effectively reach their target audience and achieve a higher ROI on their campaigns.
Trends to Watch Out For in Connected TV Advertising
To stay ahead of the game, we need to be aware of the latest trends in connected TV advertising.
To start, programmatic advertising is becoming the norm in the world of digital marketing — and connected TV advertising is no different. The shift towards programmatic will continue in the coming years, which will lead to an increase in efficiency, speed, and accuracy. Programmatically sold advertising was worth 418 billion dollars in 2021, but that figure is expected to almost double by 2026.
There’s also an increased focus on interactive, highly personalized ads that increase the chances of conversion. With the help of machine learning algorithms, marketers can now track and analyze the behavior of their audience. Based on this analysis, they can then create personalized ads that appeal to their target audience. For example, Netflix uses personalized recommendations to keep its viewers engaged, resulting in a 75% increase in user retention.
Finally, there’s a growing preference for streaming services over traditional TV. As a result, more and more brands are investing in advertising on streaming services like Netflix and Hulu over cable television networks.
These platforms offer advertisers the opportunity to reach a highly engaged audience, which makes it a perfect platform for marketers to showcase their ads. The shift towards streaming services also means that marketers must keep an eye on emerging platforms such as Disney+, Amazon Prime Video, and Apple TV+, which are all rapidly gaining traction in the market.
Challenges and Potential Roadblocks in Connected TV Advertising
Since its inception, connected TV (CTV) has proven to be a game-changer for advertisers, providing access to targeted audiences in a dynamic and engaging environment. However, CTV advertising is not without its challenges.
As a marketer, you need to be able to navigate these potential roadblocks (in addition to keeping an eye on trends and the temperature of the CTV market) to be successful.
One of the biggest challenges of connected TV advertising is that it’s often difficult to measure its ROI. Unlike traditional TV advertising, CTV allows for more in-depth targeting of audiences, but the effectiveness of these ads is not easily quantifiable. This is because, for the most part, viewership data is controlled by third-party vendors.
To overcome this, you need to leverage data from ad tech platforms and viewability standards. Focus your efforts on measuring a few key metrics, such as viewability and completion rates, to better understand the effectiveness of your campaigns.
Of course, balancing user experience and advertising is one of the most significant challenges that marketers face. Consumers expect — and demand — a seamless viewing experience that is free from interruptions. Advertisers, on the other hand, want their ads to be seen by as many people as possible.
To avoid frustration, aim to keep the ads relevant and non-intrusive. Shorter, creative spots can also help people stay engaged without feeling frustrated, and be a good way for brands to connect with consumers without being too sales-oriented.
Using different formats, such as branded banners and on-screen messaging, can also help brands match the viewer experience. These features themselves have emerged as prominent trends in CTV advertising.
Final Thoughts
Connected TV advertising has many benefits for both marketers and consumers. For marketers, it offers the ability to reach a highly targeted audience and measure the effectiveness of their campaigns in real time. For consumers, it offers a more relevant and seamless ad viewing experience.
With the rise of streaming services, connected TV advertising is poised to become the future of TV advertising.
As a marketer, it is crucial to stay ahead of the curve and embrace this new era of advertising. Paying attention to these emerging trends in connected TV advertising can help you do just that.