Review of CTV’s impact on marketing

What is Connected TV, what marketers need to know and how its expanded profile affects analytics strategy.

The video has garnered huge interest among marketers and consumers alike, with higher adoption during the COVID-19 pandemic. Different types of videos have been forming for quite some time – short form, long form and live streaming.

But it wasn’t until the home environment encouraged consumers around the world to embrace live video, propelling its content to the fore as a medium to include in a modern strategy.

This has raised the profile of Connected Television (CTV) as a marketing touchpoint for marketers. Connected TV has been around for a while. Now, marketers need to modify their strategy to include it. This also has an impact on an overall scanning strategy.

The basics of TVC

Marketers often hear about live video as an engagement opportunity. But CTV’s programming offers a dramatic contrast of engagement with that of live video. To learn more, we need to look at live streaming, then note the basics of what connected TV is and how its expanded profile impacts analytics strategy.

Live video is a real-time visual playback, making it an attractive format for events, creative influencers with a flexible schedule, and series programming with brief broadcast “seasons”. Many short videos such as YouTube Shorts and TikTok are broadcast live, as well as live video events hosted on YouTube.

In contrast, Connected Television (CTV) may contain some live events, but these are mostly more structured broadcasts – programs and series scripted to fit traditional television formats. Connected TV programming is broadcast through a device connected to a TV or integrated into the TV’s functionality to display streaming video content. The current platforms that carry CTV programming are the ones you see or hear about often – Amazon, Prime Video, Roku, Hulu and others. Apple TV and Amazon Firestick are examples of CTV devices. Even PlayStation and Xbox are considered CTV devices, as they are game consoles with streaming capabilities.

Related Article: How IoT, Automotive and SmartTV are Changing the Digital Customer Experience

CTV is #1 in video advertising

CTV was born out of consumers adopting streaming video as part of their viewing habits. The COVID-19 pandemic has accelerated this transition. People who had limited their activities to home plans due to the pandemic included on-demand programs and live events as well as general television viewing. CTV is now No. 1 for video advertising, representing the most impressions served on any device for 17 consecutive quarters, according to the latest research from Extreme Reach (ER), as reported in Martech Series.

CTV metrics are becoming important as CTV options begin to influence U.S. digital ad budgets, according to eMarketer, which also noted the increase in viewership, narrowing the ad spend gap between linear TV (traditional TV as viewers know) and CTV. They noted that the gap is “closing rapidly… By 2025, eMarketer projects ‘CTV’s advertising revenue will be more than half that of linear television’.”

This change is an opportunity for marketers and media buyers to refine their CTV budgets into performance marketing channels to connect with audiences and drive ROI.

The battle against search and social media for home dominance

CTV has emerged as a rival channel to search and social media as a major referral source for online business. CTV-enabled televisions are typically the largest screen in the home, encouraging homeowners to research goods and services to purchase as part of their TV experience. For example, Roku has an agreement with Walmart to provide customers with a streaming shopping capability, with Walmart acting as the fulfillment of those purchases.

YouTube is the biggest competitor to the current generation of connected TV platform providers. It offers its own live streams with the ability to display digital advertisements to a wide range of advertisers. Coupled with its stature as a major search engine, YouTube presents an advantage for brands that have already invested heavily in search engine optimization that includes YouTube video content.

Additionally, YouTube has started leveraging social commerce. Social commerce is meant to provide a retail experience within a platform rather than being directed to a particular website. Shoppers can learn more about a product on screen, see a call to action, and click an ad through the YouTube app.

Shopping convenience has been at the heart of recent updates to social media profiles and platform functionality. For example, Twitter just launched a business profile where followers can purchase products and services in the profile.

This made CTV a competing performance channel against a benchmark source in analytics. In past trends, people would have viewed a website while watching television. This has prompted shopping behaviors such as Buy Online Pickup in Store (BOPIS) and Buy Online Return in Store (BORIS). CTV traffic flow mixes retail. Today, they are just as likely to use a CTV. Simply put, this means CTV is competing with social media and online search for people’s attention.

Related Article: Social Commerce Is Finally Here

The impact on the analysis

Currently, half of the American population has replaced cable with CTV. Advertisers have made the adjustment to the declining interest in linear television, changing budgets accordingly.

This means there’s no longer a need for analytics tagging that makes cohort analysis and other advanced predictive analytics possible, so you can match metrics in real-time to streaming devices.

With linear television, you target by household, but its reach is limited. CTV brings additional targeting, such as purchases based on income, number of cars in the house and frequency of purchase.

The CTV analytics metric mirrors the metrics most familiar to marketers. The CTV measurement focused on optimizing the reach frequency. Reach frequency metrics include average campaign impressions, average campaign frequency, and unique reach, which represents the number of dedicated households that view CTV programming.

Audience targeting opportunities in CTV

CTV influences analytics strategy through media choices intended to potentially reach generational customers within a household. Most CTV viewers are young, but numerous studies suggest that older viewers also make up a significant cohort among CTV viewers.

This suggests that while characters vary by age, CTV can reach all cohorts with commercials. This is particularly useful when cohorts can be reached in the same household. There are currently many multigenerational households in the United States for a variety of personal reasons, ranging from young people excluded from the housing market to people who have included older family members for care.

Whatever the reason, the existence of a multi-generational household gives brands looking to connect with different people the convenience of connecting. Mixed cohorts also quickly introduce complexity if they need to be convinced of a brand’s value. Thus, converting audiences into customers becomes a tricky application of messaging. Like other attribution issues, marketers will learn to understand audience-matching messaging issues.

Marketers will also learn about the powerful influence CTV has on their brands. CTV is here to stay, so marketers will need to stay tuned to learn how analytics capture this factor in customer experience.

Lance B. Holton