The State of CTV Advertising 2021
Since the pandemic, the number of viewers, from linear to digital, such as connected television (CTV), has continued to grow. This shift has given marketers a new perspective on CTV through a digital lens, as evidenced by a new report from Innovid and Digiday. According to their findings, 64 percent of marketers and agency executives said the main benefit they hope to gain by adopting CTV is a stronger link between digital and television advertising.
CTV’s ad spend is expected to reach $ 11.31 billion this year and $ 18.29 billion by 2024, Innovid set out to understand where marketers are in their CTV journey, including how they measure success, their key challenges, and how CTV fits into their omnichannel strategy.
The majority of respondents have only recently started investing in CTV. Innovid research shows that 41 percent started allocating a budget to CTV one to three years ago, and 24 percent only started doing so less than a year ago. Meanwhile, 24% are still figuring out how to take advantage of CTV.
CTV advertising is particularly appealing lately, as marketers can incorporate it into their omnichannel strategy. For example, 83 percent of respondents told Innovid that they run CTV ads alongside social media. Other existing channels they serve CTV ads to include display advertising (78%), mobile video (77%), desktop video (67%), and linear TV (54%).
Respondents said CTV’s investments increased brand awareness (59 percent) and brand engagement (50 percent), although only 26 percent could credit CTV for higher conversion rates. .
Thirty-nine percent said CTV’s investment increased Return on Advertising Spend (ROAS); 51% don’t know if ROAS has been affected or haven’t seen any change in ROAS.
As Innovid notes, changing consumer habits have shown some brands that CTV can turn TV advertising into a direct, direct-to-consumer, and downstream response tactic. This has been the experience of Allergan Aesthetics. The company has purchased programmatic ads on Hulu and Pluto TV for its Botox, CoolSculpting and Juvaderm brands.
Its “New Years, Do Yourself” sweepstakes for Juvaderm and Botox encouraged consumers to scan Quick Response Codes (QRs) with their phones for a chance to win $ 10,000 in products. The result: over 6.5 million impressions, approximately 2,000 QR scans and an average video completion rate of 96.74% for Juvaderm, and 3.4 million impressions, 60 QR scans and an average VCR of 93 , 62% for Botox.
Right now, the top three performance indicators (KPIs) that CTV marketers value the most are conversions / revenue, reach and brand awareness.
“When marketers integrate CTV as an extension of their linear efforts, incremental reach could be their primary KPI. But if a marketer is using CTV as a complete substitute for shelf space in a television purchase, it would be helpful to examine the cost-effectiveness of reaching out of focus over an entire campaign, ”said Jessica Hogue, Managing Director, measurements and analyzes, at Innovid.
Some of the challenges marketers faced in implementing CTV’s ads include inconsistent metrics (57%), targeting the right audiences (53%), and inventory fragmentation (41%). To better measure CTV’s ad performance, 68% said they had partnered with an ad technology company, while 27% hired internal experts.
Since each device creates its own unique identifiers, CTV marketers struggle to analyze the data necessary for effective audience targeting. In response to this, more than half of respondents rely on audience targeting tactics and first-party data.
While device identifiers like IP addresses can create specific identifiers encompassing the different streaming devices in a household, single-source datasets that translate between providers are essential.
According to Innovid, a few ways to improve CTV’s measurement include establishing industry-wide metrics and avoiding ad technology providers who have different interpretations of audience reach.
Next, marketers should experiment with measuring different performance goals such as incremental reach, household reach, or message frequency, and then use the resulting data to inform future strategies. Finally, Innovid proposes to take advantage of the mid-term adjustment of campaigns in order to increase the return on investment (ROI).
Even as CTV’s investments increase, marketers still see shelf space as an important part of the marketing mix. Fifty-four percent of those polled said linear TV will make up 1-24% of their mix this year and 22% say it will make up 25-49% of their mix.
Some marketers have even increased their linear spend: 23% increased them from 1% to 24% in the past year, while 16% increased them from 25% to 49%..