Connected TV (CTV) has quickly become a popular platform for consuming video content. With the increasing number of households with smart TVs and streaming devices, CTV has become a key channel for advertisers to reach their target audience.
What is Connected TV?
Even if you haven’t heard the term before, it’s almost guaranteed you have used CTV because all CTV is is a TV that is connected to the internet and can access streaming video content. This includes devices such as smart TVs, gaming consoles, and add-on streaming devices like Roku, Amazon Fire TV, and Chromecast.
The Growth of CTV
It’s more than likely you’re familiar with CTV because according to recent statistics, the number of CTV users in the US is expected to reach 214.7 million in 2023, up from 195.1 million in 2021, which represents over 60% of the US population. And by 2025, the number of CTV users is expected to reach 227.5 million, further demonstrating the continued growth of the platform.
The increasing popularity of streaming services is one of the main drivers of CTV usage growth. According to a survey by Deloitte, 82% of US consumers now subscribe to at least one streaming service, with 55% of them watching their favorite shows and movies on a CTV device. Traditional TV viewing in the US declined by 10% in 2022 compared to the previous year. In contrast, streaming services and CTV saw significant growth, with a 33% increase in streaming minutes watched year-over-year.
The Impact on Advertising
CTV advertising spend in the US is projected to reach $14.11 billion in 2023, up from $11.36 billion in 2021. This represents a growth rate of 24.1% year-over-year. Additionally, CTV advertising spend in the US is projected to reach $21.2 billion by 2025, indicating a significant investment in the platform by advertisers.
The Benefits of Advertising on CTV
CTV advertising offers several advantages over traditional TV advertising. For one, CTV ads are non-skippable, meaning that viewers must watch them before they can continue watching their content. This guarantees that the ad will be seen by the viewer. CTV advertising offers better measurement and attribution than traditional TV advertising. Advertisers can track impressions, clicks, and conversions in real-time, allowing them to optimize their campaigns for better results.
Another factor driving the growth of CTV advertising is the ability to target audiences more precisely. Unlike traditional TV advertising, which targets broad demographics, CTV advertising can target viewers based on their interests, behaviors, and location. This level of targeting is possible due to the data collected by streaming services about their viewers. If a streaming service knows that a viewer has watched a lot of cooking shows, it can serve them ads for cooking-related products. This level of targeting is highly effective in reaching the right audience with the right message, leading to higher engagement and conversion rates.
The growth of CTV has also led to advancements in advertising technology, particularly in the area of programmatic advertising. Programmatic advertising allows advertisers to purchase ad inventory automatically and target specific audiences based on data, leading to more effective campaigns. Programmatic CTV advertising spend in the US is expected to reach $6.38 billion in 2023, up from $3.61 billion in 2021, a growth rate of 28.9% year-over-year.
Looking Forward with Connected TV
As the number of CTV users continues to grow, we can expect to see more investment in CTV advertising in the coming years. Advertisers will need to develop effective strategies to take advantage of this platform’s potential. The shift towards CTV usage and investment in CTV advertising will continue to grow in the future, making it an essential channel for advertisers to reach their target audience.
Interested in learning how to make CTV work for your brand? Schedule a call with the Well-Oiled Marketing team to learn more.
