Brands are shifting their focus to CTV advertising and are strategizing to keep up with the latest trends and opportunities. Are you ready?
Looking back over the past few years, there have been huge gusts of changes that have swept the advertising world off its feet. These transformative winds have also significantly affected the broad spectrum of advertisers and ad-supported businesses. Since the onset of the global economic slowdown, tech giants have also had to up their advertising game after having to deal with roadblocks caused by the decremental demand for traditional advertising. Credit to increasing smart device users, advertising has taken a whole new turn and is ready to bring even more dynamic shifts in the upcoming year.
The question remains, what trends must you look out for in 2024?
We are here to answer that!
The Impact of Economic Climate on Advertiser Demand
The past year has seen significant ups and downs in the global economy, and this has left a mark on advertisers across industries. Notably, tech companies that previously saw a steady rise in ad spend are now seeing an unusual decline in demand. As an industry expert has very shrewdly observed: the big tech companies have been investing a huge amount in TV advertising over the past couple of years. But they’ve had to look to cut costs, and as a result, they have decided to cut down on their TV-ad expenditure.
The consequences of this shift can be easily observed, especially in regions like the UK. Data collected from the UK market for the first half of the year reveals that several key tech advertisers either stopped spending on linear TV altogether or drastically reduced their budgets. This has a cascading impact on TV ad demand, which is a direct replication of the trend seen not just in this region, but all over the world.
The Alternative to Traditional TV
A decline in interest in traditional TV advertising has led to a mass shift to innovative advertising methods, especially CTV advertising. A new report from eMarketer says that linear now has the largest share of households, but by next year the number of households with CTV will reach 115.1 million—bringing CTV households to more than double the number of traditional pay TV households. This change is mainly because of the rising popularity of subscription streaming services, which now offer more TV shows, movies, and even live sports on CTV platforms. For entertainment seekers and TV watchers, traditional TV is now a less preferred option.
The study also revealed that the way people watch streaming content has evolved. 64% of houses with broadband internet now have a smart TV in their living room. Adults who use subscription video-on-demand (SVOD) services spend half of their streaming time watching advertisements on smart TVs, up from 31% in 2015. Additionally, the age of viewers matters in this trend. Only 39% of viewers aged 18-24 use smart TVs, while 53% of those aged 45 and older prefer them for streaming.
Also Read :- How CTV Advertising Can Boost Your Brand Awareness
The Effect of Global Events
The advertising market is rendered unpredictable because of unforeseen events. One noteworthy trend that has been captivating advertisers and brands is the potential end of the “peak TV” era. Tech companies were previously focused on investing in heavy content for online streaming, leaving traditional TV viewers to dull and repetitive content. Yet, ongoing Hollywood strikes affecting streaming services’ content pipelines have raised questions about whether this could alter the balance of power among major CTV (Connected TV) players. Industry experts, however, suggest that this upheaval is unlikely to significantly shift the landscape.
TV Viewership Shift
At this point, it is important to observe that the shift to CTV is gradual, not definite, and not uniform across the globe. In the UK, there are indications that this transition may be reaching a turning point. In 2022, the country saw the biggest decline in both weekly reach and hours viewed via linear TV. However, this was supposedly the declining peak, as in 2022 the ratio of CTV viewers to Linear TV viewers started leveling out. Yet, the rate of decline in linear TV viewership is anticipated to be considerably higher in other markets, as there is still significant room for streaming growth. In France, for example, linear viewership has dropped by only 8% in the last five years, compared to a 30% loss in the UK. This transition to streaming is expected to boost the volume of CTV inventory available to advertisers significantly. The critical question is who will own this inventory.
The Role of International Platforms
Major global platforms will undoubtedly play a role in this ecosystem, but they will not be dominating. Streaming giants like Netflix and Disney may not command a large share of the market due to their business models. Netflix, for example, accounts for only about 8% of UK viewing, and even if some of that is ad-supported, it remains a small portion of the entire market.
Also Read :- The Benefits of Targeting Specific Demographics with CTV Ads
The Rise of FAST Services
Free ad-supported streaming TV (FAST) services are also set to grow their share as viewing numbers increase. However, their share remains relatively small in comparison to the broader market.
Despite the challenges posed by the global economic climate, the advertising industry’s transformative journey continues. Tech companies and traditional broadcasters alike are adapting to new market realities. The impact of streaming services and the rise of CTV advertising are significant trends, with ample opportunities for advertisers to explore. As we move forward, advertisers need to stay informed about the latest developments and trends in CTV advertising, ensuring they can harness the full potential of this dynamic and evolving landscape.
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