Television was and continues to be one of the biggest and most impactful advertising channels of the last 70 years, but it also wasn’t an open ecosystem for advertisers. High friction sales processes, complex media planning processes, and high cost commercial production allowed only a small selection of household brand names to make their way into the commercial rotation while startups struggled to gain access. Today, the dynamic is quite different. Approximately 80% of households own a connected TV (CTV) capable of delivering personalized ad content to viewers and new access points for ad buying and creative development have brought down the barriers to entry for early stage advertisers.

Suddenly, digital-first brands that couldn’t break into linear television can reach CTV markets. What they’re learning is that CTV is an exceptionally powerful channel where audiences will gladly watch ads, remember them easily, and convert in a measurable manner. Our team at tvScientific recently summarized these insights in a new report, but it’s worthwhile to consider the deeper implications of what these mean for marketers in 2022.

Audiences Love Ad-Supported Streaming

The rise of streaming entertainment options isn’t a recent development. CTV viewing times reached parity with linear TV devices in 2019 and surpassed them shortly thereafter. These trends continue to unfold today as 56.7% of audiences stream their content digitally, as opposed to 26.3% who watch cable networks.

What has changed is that audiences actually like seeing ads on a CTV. After all, if you already have Netflix and Disney+ but want to watch a Peacock exclusive, it’s far simpler to watch a few ads than manage another subscription plan. According to tvScientific’s market research, 49.3% of consumers will gladly embrace ads in exchange for content they enjoy, rather than pay for yet another service. As a result, consumers increasingly have more choice in both what they watch and how they’ll pay for it.

But that’s not the only opportunity for marketers. The transition from linear TV to CTV also opens the door for digital marketing techniques, the most significant being personalization. In fact, almost 90% of consumers are annoyed when ads they watch aren’t personally relevant to their interests. Brands can target audiences far more effectively by bringing personalization strategies to bear on CTV campaigns just like search or social advertings. While retaining the overwhelming attention and recall benefit from the channel’s high engagement.

Marketing Technology News: tvScientific Launches CTV Performance Advertising Solution for Games

As a Marketing Channel, CTV Is High-Performance and Cost-Effective

There’s an immense opportunity to reach new audiences if brands are willing to invest in CTV-based advertising. Even as the number and quality of streaming devices increase, most customers still prefer to watch video in front of the television. They just want that TV set to be internet-connected. Approximately 50.4% of consumers use smart and connected TVs, while another 23.5% use an external smart device to enable OTT content.

Advertising seen on CTVs also significantly impacts brand recall. Our latest research found that 45.75% of audiences remember ad content they viewed on televisions, surpassing social media, mobile game ads, and traditional website ads. Positive consumer sentiment for CTV ads is also higher than social, search, and display ads. With so many consumers turning to smart TVs and externally connected devices, advertisers can maintain or improve against their performance goals by investing in CTV channels.

And as seen on TV, “but wait, there’s more!” CTV ads are far more cost-effective than other digital channels. That’s because 41% of families watch their CTVs together, which lets more people view the same ad simultaneously. This process converts anywhere from one to five customers, reduces overall costs, and maximizes ROI — all major priorities for today’s marketers.

Measurement for TV is possible in ways that were previously unattainable. 

Growth marketers had previously categorized TV as a “brand marketers” playground because of the lack of deterministic measurement that tied TV ad exposure to tangible revenue-driving advertising goals such as install or purchase. But with the impact of larger screen sizes, the obvious consumer preference for TV’s ad break format, and the recall and favorability television ads generate, it’s clear that marketers focused on ROAS measurement should be leaning into CTV.

With the development of 1:1 deterministic attribution processes, marketers have every reason to explore CTV advertising as part of a valuable growth marketing mix. And for the more sophisticated marketers who are already thinking about attribution in a “Post-Last Click” world, the right platforms will help identify the best assignment of credit as television ads occur before the “last click” of other channels. This improvement in immediate deterministic measurement and attribution gives CTV advertising an instant optimization feedback loop that marketers previously could only get from search or social channels.

Marketing Technology News: MarTech Interview with Jason Fairchild, CEO and cofounder at tvScientific

What’s The Next Step For Brands?

To fully realize these opportunities, brands will need to do more than adjust their marketing spend. It’s time to apply the performance marketing techniques that help brands win in the digital media space to television. For example, marketers should use platforms that allow for sophisticated targeting and attribution. They should also engage in creative testing to optimize ad content for maximum performance. It’s also important to consider retargeting opportunities — such as web-to-TV or TV-to-mobile — to engage audiences on their most influential screens.

CTV is a winning performance marketing channel on multiple levels. It drives consumer engagement, enhances brand affinity, and is proving far more cost-effective than other digital markets, given how CTV is less entrenched than social media. Most importantly, it levels the playing field for TV advertising so any brand can target its most valuable audiences. These factors will make CTV campaigns one of the biggest opportunities in the year ahead — if marketers are willing to embrace them.