Connected TV ads have piqued marketers’ interest, but there is not a watershed of demand – yet – as marketers still cite measurement and inventory challenges.
According to a joint study released by the Association of National Advertisers and BrightLine, the maker of an interactive video ad server built exclusively for the connected TV space, 43% of 215 marketers surveyed in June said they were “very familiar” with connected TV as a medium.
Despite their knowledge of CTV – defined as Internet-connected devices that include smart TVs and over-the-top services like Roku, Xbox and Amazon Fire TV – only one in five said their company engaged in connected TV advertising over the past year.
Budgets are, at best, “modest,” given that fewer than half of respondents even allocate a portion of their TV budget to over-the-top advertising and, for those that do, it’s at a measly rate of less than 1%.
Still, the ANA and BrightLine found that close to half of the marketers plan to allocate more of their TV ad budget to connected TV devices in the coming year.
Budget reallocations may characterize CTV investments for the foreseeable future. About 71% said they would shift dollars from traditional TV, while 37% plan to do so from digital.
“While marketers want to follow the eyeballs, there’s still questions about where they can access ad-supported inventory in the mix,” said Rob Aksman, chief experience officer for BrightLine.
“Bigger picture, we’re seeing a natural lag time reminiscent of a market catching up to consumer behavior,” he added. “You can compare it to the belief that mobile spend is significantly lower than it should be given the number of hours we spend on these devices.”
Connected TV ads are attractive to marketers who want to capitalize on consumer viewing behavior and take advantage of digital-like targeting, according to Bob Liodice, president and CEO of the ANA.
But there are several key issues stymying widespread adoption of CTV as an advertising tactic.
While 60% of respondents who engaged in over-the-top advertising said audience penetration was a problem, even more – 69% – said measurement was their biggest challenge.
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For instance, while Nielsen is priming a Total Audience product inclusive of connected TV and other streaming services by the end of the year, there isn’t a single measurement offering available to marketers yet.
Aksman predicted questions about “who owns the campaign at the agency level?” could also impact marketer’s CTV investments.
“From our vantage point, it sets off turf wars because people are asking, ‘Is it television or is it mobile or digital?’” he said. “A connected TV buy is executed exactly like digital, but in terms of consumer behavior, it’s more like TV since you’re sitting on the couch.”
Another concern marketers have is that connected TV inventory is scarce or comes at high CPMs, but Aksman claimed there is plenty of quality, affordable supply in the space. It’s just that premium content owners are still executing a majority of deals through direct sales or private marketplaces, he said.
“You see every major broadcaster launch or who will launch soon their broadcast network’s content in the OTT space,” he said. “We’re already seeing triple-digit growth. There is inventory out there for people who want it and who are willing to do the extra work to execute on OTT.”
