The surge in CTV’s popularity over recent years can largely be attributed to the COVID-19 pandemic. With lockdowns in place, people sought fresh entertainment options, and connected TV emerged as a straightforward solution. Notably, the U.S. Census Bureau recorded a 35% rise in electronics shopping during this period, indicating increased investments in home entertainment.
Though lockdowns have been mostly lifted worldwide, TVs remain a central fixture in our lives. On average, Americans dedicate 2-3 hours daily to TV consumption. CTVs now serve as a dominant entertainment hub in the United States, with 88% of households accessible via CTV at the start of 2022, up from a mere 50% in 2014.
Who Uses Connected TV Streaming Services?
Another noteworthy aspect is the swift adoption of CTV by younger generations. Research reveals that over 80% of CTV users fall within the age range of 25 to 54, encompassing Millennials and a substantial portion of Gen X. Gen Z viewership is anticipated to surpass Gen X soon, likely in the current year, as this emerging generation attains financial independence and increased purchasing power.
Consider this: over half of U.S. adults have either cut the cord or never subscribed to cable TV in the first place. Traditional television continues to decline, as younger generations increasingly favor the on-demand convenience offered by streaming and other CTV services.
CTV’s Enduring Relevance; What’s Next?
As CTV’s reach expands, so does the advertising market associated with it, despite the majority of streaming services providing premium ad-free options. Surprisingly, approximately 73% of consumers prefer ad-supported streaming due to rising costs. Moreover, they willingly engage with these ads, with CTV ads boasting an impressive completion rate of 97%. Considering that standard video ads typically aim for a completion rate of 70%, it becomes evident why the CTV ad market has grown so competitive: it delivers results!
What’s Next? However, securing premium ad space comes at a price, with an average effective CPM of $50-$80, some of the highest rates in the programmatic industry. This cost can be mitigated through effective strategies; for instance, reported a CPMs of nearly $48 in April 2023, which further dropped to just $39 in May. This means more consumers are exposed to the ads, and our platform users are spending less to ensure their ads reach their intended audience. Let’s delve into some best practices for CTV ads:
Maximizing CTV Ad Impact
Leverage Your Information Wisely Connected TV ads, fundamentally video ads, usually lack the option to skip. This characteristic makes CTV ads ideal for conveying more information than typical video ads. You can distribute your message more evenly throughout the ad’s duration. While it’s crucial to capture attention with a compelling and front-loaded message, you need not rush to convey your entire message within the first 5 seconds.
Don’t Neglect Linear TV Relying solely on CTV and forsaking traditional broadcasting is unwise. No single advertising avenue should bear the full weight of your strategy. Even within the television landscape, combining both CTV and traditional TV yields optimal results for several reasons:
- Traditional TV remains the preferred medium for its audience, which often lacks access to many other digital tools.
- Despite CTV’s rapid growth, traditional TV still commands a substantial viewership. Vizio suggests that exclusively utilizing linear or connected TV may result in missing out on up to 50% of your potential audience.