While COVID-19 will be a lingering source of uncertainty, it shouldn’t be considered the defining factor in the growth of connected TV (CTV) specifically. It’s true the pandemic disrupted the advertising industry as a whole — including an initial significant downshift in advertising and reduced media spending followed by ~15.6% growth in 2021. Predictions for 2022, however, suggest a return to pre-pandemic levels of spending, and the opportunities for savvy marketers to harness the advantages CTV offers make it a prime candidate for that spending.
The enormous acceleration of streaming TV in the past two years jump-started interest and investment in CTV. Even with the promise of returning to some level of normalcy, the efficiency and ease of programmatic CTV over more burdensome direct buying remain. Increased competitive activity among major players in the streaming space will continue spurring enhanced and new solutions that will further streamline buying and empower cross-screen deduplicated reach. Standardized deal taxonomy — something Xandr has invested in through our Premium Video Catalog — provides more granular and targeted access to specific content across multiple screens, empowering scaled advertising to increasingly specific, interested audiences. Reaching valuable audience segments wherever they’re watching can be a boon to advertisers, who have long been looking to solve challenges of deduplicated reach and more accurate outcome reporting as they craft meaningful experiences and relationships with current and prospective customers.
One of the biggest drivers of growth in CTV (and an area of significant opportunity) is political spending leading up to the midterm elections. Overall political spend in 2022 is projected to be the same as in 2020, and the high stakes mean buyers will be on the lookout for platforms and solutions that can rise to the occasion. With the high level of political polarization and amount of time many Americans spend each day watching political content, CTV’s high video completion rates and position on the largest screen in the home make it a highly effective channel for must-see ads. CTV’s powerful targeting granularity and scale can play a critical role in battleground states and down-ballot races, an important consideration given the strategic value of local elections. Since it’s driven by real-time data, CTV’s targeting and ability to incorporate first-party data provide a wealth of opportunity for tailored messaging when very precise differences in geography and demographic segment targeting have huge implications. Audience authentication, digital attribution, and the ability to optimize campaigns quickly without lengthy commitments make it a natural fit for the adaptive nature of political advertising during an election cycle.
None of this is to say that CTV is without flaws. There are political and business challenges, like buyers not wanting to incur fees for programmatic guaranteed buying or inconsistency between agencies on who is responsible for CTV buying. To meet this moment, platforms and the industry at large have work to do and misconceptions to overcome to take advantage of the growth potential that awaits. Fragmented, deal-gated inventory will remain a top concern — as will the need for standardization and more universal campaign measurement — to ensure the promise of scalability is fulfilled. Innovative thinking that leverages data science and helps buyers define and measure increasingly defined audiences and descriptors can improve outcomes and maintain the accelerated appetite for CTV campaigns. CTV has already shown accelerated growth as a result of the pandemic; as traditional and digital media advertising continues toward convergence, the market is primed for platforms that invest in the tools and partnerships to meet the moment.