When the pandemic forced people indoors they became desperate for distraction, assuaging their thirst for content on subscription streaming services such as Netflix and Amazon Prime. But, according to Phil Duffield, VP, UK at The Trade Desk, something more interesting was happening, certainly from an advertiser perspective.
“The old guard of watching content on normal TV was changing,” he said. But so too was “people’s acceptance of advertising on these platforms”.
“Before the pandemic, when people were paying for subscriptions, advertising was still something they didn’t enjoy,” Duffield explains, “but now, because more people have adopted more free OTT platforms, they are fine with relevant advertising.”
Duffield cites a piece of research that found 60% of Brits signed up to a new streaming service during lockdown and 70% of Brits would prefer to see relevant advertising than pay to watch TV.
The draw of CTV
Advertisers are responding accordingly. Our quantitative and qualitative research, which surveyed marketers, media owners, agencies and ad tech experts, found marketing professionals were drawn to Connected TV (CTV) opportunities for multiple reasons.
Respondents were quizzed about what they deemed the top three benefits of CTV (to see the most popular three, please see our infographic). Yet, other benefits listed were: performance measurement (21.1%), engagement (16.8%), incremental reach to linear TV (15%), reach (14.3%), ability to control frequency (13.4%), ability to retarget (13.2%) and less ad clutter (12%).
Our research also highlights many other positives around CTV advertising, such as the fact that 36% were “considering” moving their budget from linear into CTV.
Testing the water
But it also shone a light on a reticence among some professionals. Nearly a quarter (24%) of respondents said they were not considering such a move and 40% didn’t know.
Delving deeper into that tentativeness, respondents were asked to name the three factors inhibiting investment into CTV advertising. While the top three appear in our infographic, other high scorers included the fragmented nature of the market (28.4%), insufficient industry collaboration (24.9%), being unsure of the benefits (23.9%) and technological infrastructure (22.9%).
It was little surprise, then, that when asked whether agencies, suppliers or their clients would create bespoke content for CTV in the next 12 months, the largest proportion (43%) didn’t know. That said, a sizable 29% said yes and the remaining 28% said no.
Clearly, the industry is still feeling its way around CTV, rather than diving headlong into it, a point reflected in sentiment surrounding the hiring of dedicated CTV talent.
Asked how they are responding to CTV’s rise by organising their media teams, just 7% said they were actively recruiting new talent fluent in the discipline; while an encouraging majority (39%) said they were taking steps to ensure their TV teams are fluent in both linear and CTV, but were not seeking to add new talent. And a quarter said they were not changing their team structure as they were already fluent in both.
Lastly, a significant 29% said they would not reorganise, as they were uninterested in CTV opportunities.
That degree of willingness and unwillingness for structural change was reflected in approaches to ad buying, with 41% of respondents saying they had not made unified buys across linear and CTV. Even so, 21% said they had.
Overall, our research unearthed solid commitment to CTV from clients and their partners, with 15% spending between 20% and 30% of budgets on CTV during the past 12 months, 7% spending between 30% and 40%, and just 2% of clients spending 90%.