A Recent report published by eMarketer identified some major connected TV advertising trends in 2018. Their Global Media Intelligence Report is dubbed A Reference Guide to Consumers’ Media Use in 40 Countries. The report contains detailed compilations of data and insights about consumers’ traditional and digital media usage. It is an important report because it allows advertisers and marketers access to information they need in order to make educated decisions when planning their media buys for 2019.
Major Connected TV Advertising Trends In 2018
One of the major connected TV advertising trends we are seeing in the U.S. is a shift from traditional linear television to subscription OTT (Over-the-Top) video streaming services like Netflix and Amazon Prime Video. Another major connected TV advertising trend is the growing number of households that own a smart tv due to lower price points and increased options.
Definitions To Help You Understand The 2018 Connected TV Advertising Trends
Smart TV: A TV with built-in internet capabilities
Connected TV: A TV set connected to the web through built-in internet capability or through another device such as a Blu-ray player, game console or set-top box (e.g., Apple TV, Google Chromecast, Roku, Amazon Fire Stick).
SVOD: “Subscription video-on-demand”; defined as “a service that gives users unlimited access to a wide range of programs for a monthly flat rate,” e.g., Netflix, Sling.
OTT: “Over the Top”; defined as “the term used for the delivery of film and TV content via the internet, without requiring users to subscribe to traditional cable or satellite TV services such as Comcast, Dish, or COX. People who use OTT are often refered to as cable cutters.
This year, eMarketer expects 170.1 million people in the U.S. will use a subscription over the top (OTT) service to obtain entertainment – this means 60.8% of internet users will consume OTT content at least once per month. With that said, it is important to keep in mind that a lot of users do not have their own accounts because log-in credential sharing is very common in this space.
A separate study related to connected TV advertising trends conducted by the GlobalWebIndex found that roughly 70% of internet users have used a subscription video-on-demand (SVOD) service in the past month. The reason for the slight gap between the two research firms is the Global Media Intelligence report only considered respondents between the ages of 16 and 64, whereas the eMarketer report is age agnostic.
70% OF US INTERNET USERS CONSUME SUBSCRIPTION VIDEO-ON-DEMAND (SVOD) CONTENT MONTHLY
What this connected TV advertising trend means for advertisers and marketers is the majority of internet users have started to adopt and consume Connected TV in some form or another. Smart TV technology is becoming more accessible and OTT content is rising in quality. The mass adoption and shift to connected TV from traditional cable or satellite TV is right around the corner.
Why Should We Advertise On Connected TV?
Looking at the chart (above), you will see that 69.9% of internet users are consuming SVOD content at least once a month. This connected TV advertising trend is telling us the future of entertainment is CTV and that is why Watts Media has technology that allows us to bid on and place commercials on Connected TVs.
There are no doubt the data is saying Gen Xers and Baby Boomers are listening to the Millennials recommendations to cut the cable and adopt subscription video services; this is driving over-the-top (OTT) entertainment adoption and programmatic advertising capabilities.
We believe the older generations enjoy this shift in technology because it is cheaper than cable and satellite TV, but still allows them to watch the traditional linear tv programming they have grown to love. Services like Dish and Comcast are now threatened by companies like Sling because everyone can watch their favorite NBC programming while eating dinner after work just as easily as they can watch live sports on their Smart TV every weekend.
37.2% Of American Households Have a Smart TV
Smart TV ownership is expected to reach 46.0 million US households in 2018 which is a growth of 16% since 2017. Pushing along this connected TV advertising trend is both Amazon and Roku who have been discounting the costs of smart TVs to ensure there are options for every price point. During Amazon Prime Day, the best selling TV was a deeply discounted Toshiba smart TV with the Amazon Fire operating system (OS).
As the barrier to entry for smart TVs and over-the-top (OTT) content continue to lower it is our belief that Connected TV (CTV) will become the next major programmatic advertising channel.
Connected TV (CTV) is the Future of Television
The GobalWebIndex H1 2018 survey found that nearly 40% of US internet users own a smart TV and roughly 30% of them use their smart tv to access the internet every month. The operating systems of today’s smart TVs have more capacity and offer access to more streaming services and apps than older generations.
What this connected TV advertising trend means is smart TVs will have more intuitive user interfaces (UI) and their simple connection to the internet will provide a more natural and interactive experience for users. Likewise, the advertising experiences that become available in connected TV private marketplaces will grow increasingly intuitive and personalized.
SVOD companies like YouTube and Hulu sell ad inventory on exchanges which gives agencies and brands the ability to programmatically bid on and then purchase millions of advertising opportunities every second. These ad-funded video streaming services have proven people are willing to watch ads in return for free premium content.
It is only a matter of time before the premium subscription video-on-demand market pushes publishers like Netflix to offer a free, ad-funded viewing option. This connected TV advertising trend means programmatic trade desks like Watts Media will have the ability to show hyper-personalized ads to very specific audiences that are based on the largest pools of 2nd and 3rd party data television has ever seen.
Big Data Allows Us To Send More Relevant & Personalized Ads
With the increased adoption of connected TVs and smart TVs and the increasing computing power of Internet-enabled televisions, we are starting to see big data open up ad targeting capabilities inside of private marketplace (PMP) programmatic ad auctions. Right now, Watts Media has seats at 61 of these programmatic PMPs which means we have the ability to place ads on Sling, Roku, Crackle, Direct TV, and more.
Some of these programmatic PMPs have audience data layered into them. To give an example, we can send connected TV (CTV) ads to users between the ages of 25 and 49. We can also send CTV ads to male homeowners who live in certain cities, in certain zip codes, and on certain streets.
This connected TV advertising trend means audience targeting is possible because the publisher of the ad inventory has 1st party data about their users and they use that information to build private marketplace deals that only display ads to those specific and desirable audiences. The geographical target data is possible because of the hyperlocal advertising technology Watts Media uses to buy the ad inventory.
We Can Remarket Your Website Visitors With CTV Ads
We are moving towards a day where hyper-personalized connected TV ads will have the same prowess as today’s programmatic web and mobile targeting capabilities.
Currently, we can place a pixel on your website or landing page that collects your website visitors Device ID and places it in a custom audience segment on our secure Data Management Platform. That custom audience segment then becomes 1st party data that we can layer into a connected TV private marketplace real-time bidding (RTB) auction. Basically, this means that we can show a TV commercial to people who have visited your website and shown interest in your products or services.
This technology is scaling in computing power quickly which is allowing advertisers to access more and more granular data about their audiences. This is increasing the effectiveness of the campaigns Watts Media runs because we are sending targeted messages on specific TV channels to users who fit the buyer personas we have described with our clients help.
Companies like Netflix will soon start to listen to the consumers as they search for more ways to obtain market share and remain competitive.
Facebook Is Shutting Down Its Connected TV Ad Network
It was reported by ADWEEK on Nov 4, 2016 that Facebook would be taking aim at the television advertising market by teaming up with A&E Networks and Tubi TV to test the concept of a Facebook Audience Network that delivered video ads through set-top boxes like Apple TV and Roku.
They saw the market respond favorably to the concept of turning a dumb TV into a smart Tv using set-top box devices which are basically little wifi receivers that allow you to access internet enabled OTT streaming apps like Netflix and Sling TV.
Fast forward two years and Facebook has officially decided to stop selling ads inside publishers’ OTT apps by January 2019. There have been a few factors leading to this result. The major one is Roku has found a lot of success in the programmatic private marketplace deals and began limiting third-party ads within their platform. The second reason is they were unable to get the word out to medium-sized advertisers which means they didn’t attract enough premium publishers.
What do these connected TV advertising trends mean?
Most marketers managing brands that are currently placing traditional linear TV commercials should keep their eyes and ears on the progression of CTV. As more Americans cut the cord and transition into smart TV ownership, we will see the advertising dollars make the shift as well. If you want to reach high tech Millenials then you should be focusing on a CTV strategy today. If you want to be reaching the Millenials parents, then you should be planning to make the shift to connected TV advertising in the next couple of years.
We pointed out a lot of connected TV advertising trends in this article and the one Watts Media is most excited about is the progression and integration of big data and CTV. We are using 1st, 2nd, and 3rd party data to do amazing campaign optimizations in the programmatic web and mobile advertising markets. One day we will be able to build equally granular audiences that are programmatically advertised to on web, mobile, and CTV. Until then, we will continue to educate you on which connected TV advertising trends matter the most.
If you enjoyed this article and want to learn more about how you can start implementing CTV into your media mix then please go to this page and submit a demo request.
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