Step into the world of Connected TV (CTV), where innovation meets entertainment in an ever-evolving digital landscape. CTV stands at the forefront of growth and opportunity as streaming services continue to reshape the way we consume media, presenting a myriad of trends, challenges, and exciting future prospects. In this blog we will peer into the future of CTV.
In the rapidly evolving landscape of digital media consumption, understanding the distinction between Connected TV (CTV) and Over-the-Top (OTT) platforms is crucial for businesses and consumers alike as they navigate the intricacies of modern entertainment delivery and advertising strategies.
Defining CTV and OTT
CTV is any television set that can be connected to the internet, allowing users to access streaming video content and other online services directly through their television sets. Think Smart TVs and gaming consoles.
OTT refers to the delivery of film and TV content over the internet, bypassing traditional cable, satellite, or broadcast television platforms. Think of app or content distribution platforms such as Amazon Prime, Netflix, and Hulu. Over-the-top (OTT) streaming apps or content can be viewed across mobile, tablet, and desktop/laptop devices in addition to connected TV devices (Smart TVs, gaming consoles, streaming sticks, etc.).
While CTV is hardware, OTT is software.
The future of CTV looks bright
CTV had a 10.9% growth in 2023 and is expected to grow by 13.8% in 2024 according to forecasts, yet we’re still in a space where demand hasn’t caught up with supply. The potential for CTV growth within media is huge! Several factors contribute to this growth:
- Increasing Consumer Adoption: we’re seeing a rise in consumers taking the cord-cutting approach, people are moving away from cable and switching to streaming providers, and consumers only want to pay for the streaming services they’re interested in and nothing more. Take sports, for example. If you’re a Football fan it doesn’t make sense for you to pay for the full sports package if you’re only interested in watching NFL Sunday Ticket. We’re also seeing younger generations like Gen Z and Gen Alpha growing up strictly on streaming services. As these audiences continue to grow, we’ll see an increase in CTV usage. From a consumer perspective, the adoption rate of smart TVs is helping increase the expansion of CTV. These days when someone purchases a new TV it’s likely a smart TV. According to eMarketer, it is forecasted in 2025 that 79.7% of all households to have a smart TV.
- Shift in Advertising Spend: Advertisers are recognizing the value of CTV advertising due to its ability to target specific audiences with precision, leveraging data analytics and audience segmentation capabilities. As traditional TV viewership declines, advertisers are reallocating their budgets to CTV platforms to reach cord-cutters and younger audiences who predominantly consume content through streaming services.
- Expanding Content Libraries: Streaming platforms are investing heavily in original programming and acquiring rights to popular TV shows and movies, attracting subscribers with a diverse range of content options. This expanding content library further incentivizes consumers to adopt CTV services and contributes to subscriber retention.
- Technological Advancements: Continuous advancements in streaming technology, including improvements in streaming quality, user interfaces, and recommendation algorithms, enhance the CTV viewing experience, making it more appealing to consumers.
- A Cookieless Solution: Unlike traditional online advertising channels, CTV operates in a cookieless ecosystem, meaning it doesn’t rely on tracking cookies to target audiences and measure ad performance. This shift is significant for advertisers as it emphasizes privacy and data protection, aligning with evolving consumer expectations and regulatory requirements.
As technology continues to evolve and consumer preferences evolve, CTV is poised to play an increasingly significant role in shaping the future of entertainment consumption.
Challenges with CTV
- The streaming landscape is highly fragmented with numerous devices, platforms, apps, etc. which can bring challenges for reaching a mass audience
- The lack of standardized measurement metrics across various streaming services can potentially make cross-partner measurement challenging
- Brands without programmatic traders or agencies with in-house DSPs may have trouble navigating the fragmentation and ensuring buys are brand-safe and set up correctly
- CTV has higher CPMs versus other digital channels, such as display or online video due to the premium environment. Many direct buys may have high minimums.
- Brands will need video spots which can be expensive to produce
In conclusion, the landscape of Connected TV (CTV) is rapidly evolving, offering both opportunities and challenges for advertisers. With increasing consumer adoption, shifting advertising trends, and technological advancements, CTV holds significant potential for growth within the media.
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