Brits are ditching traditional linear TV at a faster rate than ever. Savvy marketers are hot on their heels, looking for new ways to deliver more effective programmatic campaigns. Connected TV (CTV) is opening up fascinating opportunities in a UK ad market that’s evolving at breakneck speed.
We’ve kept an eye on CTV as it matures here and we’re optimistic (to say the least!) about its next few years. If you’re considering moving some budget in that direction, here’s what you need to know.
What is CTV advertising?
Any telly that you can hook up to the internet to stream content from non-terrestrial or cable sources is a CTV. Advertisers can target audience profiles and specific content channels to show ads which are way more relevant and engaging than those shown via linear TV.
Marketers are using CTV ads to support their existing campaigns, covering different audiences across multiple screens. Traditionally, they had to navigate a bit of a fragmented marketplace, but now that ads are bought programmatically (or at least they should be) it’s unlocking:
- A simpler ad-buying process
- Faster lead times
- Better audience targeting
- Optimised reach
2022: The state of CTV in the UK
The CTV landscape is still maturing here in the UK, but it’s growing up quickly. We’ve been Europe’s fastest cord-cutters since 2018; 1.34 million of us ditched cable and satellite subscriptions in Q3 2021 alone. Advertisers agree, this is the year that people get serious about CTV.
What will that look like exactly? Well, we’ve been watching the bigger global picture of how the marketplace is developing and we can make some informed predictions. Our eyes have been on the US, where the events of past years have pushed CTV spend to the moon. We’re expecting to see those trends play out here as well.
2021 saw an 82.4% increase in the amount spent on CTV ads in the US. It’s starting to seriously cut into mobile’s dominant share of ad spend. The pandemic took the pre-existing trend away from linear TV and strapped it to a rocket.
American households with pay TV subscriptions are down to around 74 million, while CTV devices number over 213 million. The UK market is on the cusp of the same kind of programmatic revolution.
The people are demanding CTV
We can say that with confidence, because it’s already happening in many ways. Research throws up some intriguing facts about where audiences are at right now:
- 89% of people surveyed use streaming services weekly, 74% use AVOD
- 85% are happy to watch ads in exchange for cheaper subscriptions
- Their average subscription spend is £25, but many would be willing to spend up to £32
- 78% took action after watching a CTV ad
There’s staggering potential for marketers to expand into CTV. It’s also worth noting that we need to ditch those preconceptions that say it’s only millennials and Gen Z who are cutting the cord. In 2020, 26% of the UK’s CTV audience was aged 55 or over. There’s a wealth of opportunities for connecting with truly diverse sets of people.
What’s next for CTV advertising?
At a glance, there are a few things which we can reasonably expect to see in the very near future:
- Emergence of centralised benchmarking standards
- Rapidly advancing platforms specialising in CTV
- Massively growing audiences for CTV content
- Access to more coherent, joined-up data
- Greater investment in CTV from major brands
- Stiff competition for the most lucrative audience profiles
The next 12 months are going to be pivotal. At the highest levels, we’re likely to see someone step into a measuring role, giving benchmarks against which to judge the success of CTV campaigns. Nielsen did this in the US, it could be another private enterprise who formalises things in the UK. Alternatively, an independent body like UKOM might prove to be a better fit for the job.
We’re also going to see CTV-specific supply-side platforms (SSPs) emerge to help advertisers work more easily across a greater number of publishers, channels and marketplaces. There’s still a lot of broadcasters sitting on their own datasets which, when pooled together under one SSP, will make advertising more efficient and secure.
In other words, the technology needs to catch up with the public goodwill towards CTV, that should happen this year. Once it does, things will become more transparent on the ad buyer’s side as well. They’ll be able to target different portfolios and test different strategies more easily.
New players driving growth
OTT brands like Rakuten have enjoyed healthy growth, there’s no reason not to suspect they’re going to continue opening up more eager CTV audiences. The same goes for AVOD services from traditional players like Paramount and the Discovery Channel. Even free ad-supported TV (FAST) platforms like Samsung TV+ are going to do their bit to bring in more new eyes.
It’s very possible that CTV content’s share of viewing time will rival subscription-based and free TV combined within a couple of years. That’s going to drive competition and bring in game-changing levels of investment. Amazon, Apple and Google are already devoting resource to exploring the possibilities.
In the wake of booming audiences, buyers will have no option but to adapt or fall behind. CTV will explode beyond the simplistic mix of YouTube and BVOD which some see it as today. Hybrid CTV-linear ad strategies will disrupt traditional buying practices in the same way as we saw in the US.
This is all amazing news for consumers, who will see themselves reflected more accurately in the advertising they’re shown. Better data, improved targeting and a surge of competition will drive up the quality of advertising as a whole. It is, in short, a very interesting time for UK marketers to get into CTV.
INVESTING IN THE FUTURE OF ADVERTISING
CTV is the fastest-growing means of connecting with relevant targeted audiences. It’s also, for now, a big source of untapped opportunities with which to complement your existing TV buying strategy. But time is running out, sooner or later people are going to catch on.
If you feel it’s time for your organisation to face the future, we can help. Using market-leading data from our friends at Skyrise, we’ll work together to build the best possible picture of your audience and target them with your brightest creative ideas. Ready to get started?