Why advertisers are still waiting on the CTV promised land

By Kimeko McCoy

For the last decade, advertisers have predicted the proverbial death of linear television — and thus linear television advertising — at the hands of everything from the digital video recorder, digital advertising and now, the rise of streaming and ad-supported video. But even as the digital video market is on fire, it won’t leave linear TV in ashes, agency execs say.

While digital video, which incorporates everything from video on social to streaming (namely connected TV), has a more captive audience than ever, fragmentation and murky measurement makes it shaky ground on which to build the bulk of a video ad strategy, said agency execs. CTV’s growing pains, which touches on a variety of challenges from data fragmentation to wranglings over pricing, have been a point of contention since at least last January– and they continue to be.

“We’ve made it to the promised land, but the promised land looks a bit like where we’ve just been in the sense that there’s huge fragmentation across the digital media landscape,” said Andrew LaFond, ‪vp and executive director of media and connections at R/GA. “We made it to the future [but] the future has its own challenges that we need to work through.”

Overall, the industry is increasingly shifting linear television dollars to digital ad budgets. In Q1 of 2022, 43% of brand professionals said they weren’t spending any of their marketing dollars on TV, according to Digiday+ Research. That figure increased slightly to 48% by Q3 2022 and then again to 49% in Q1 of this year. Meanwhile, 59% of the brand professionals who said they spend on TV advertising put a moderate portion of their budgets toward CTV, per the research.

For the first time ever, U.S. adults are expected to spend more time watching digital video, via Netflix, TikTok and YouTube than traditional television, according to Insider Intelligence. On average, people will watch 3 hours and 11 minutes of digital video this year in comparison to 2 hours and 55 minutes of traditional TV. While things like TikTok count as digital video, it’s not perceived or valued the same as streaming or what’s considered premium content featured on platforms like Hulu, Netflix or HBO Max.

However, where eyeballs are going, advertisers and their dollars are sure to follow, namely spending on CTV, which is expected to account for 7.3% of ad spend this year, up from 6.1% last year, per Insider Intelligence. In fact, Mondelēz-owned brand Chips Ahoy’s has shifted its ad spend almost entirely away from television to focus on social and digital ad channels to reach a younger audience. Those digital ad channels include TikTok, Instagram, Twitter and connected TV, per the company.

At R/GA, some clients have never advertised on linear, leveraging digital video ads as the entry into video advertising, according to LaFond.

Much of that is thanks to digital video’s flexibility in both media buying and creative, an uptick in viewership, as well as improved measurement and targeting capabilities. The …read more

Source:: Digiday