The Explosive Growth of Connected TV (CTV)

The explosive growth of Connected TV (Referred to as CTV or OTT) helps solve a major problem for marketers – reaching their target audience in a highly effective and personalized way. With the rise of programmatic advertising and the emergence of AVODs (Read on to learn about AVODs), CTV has become a highly effective platform for advertisers to engage with consumers. This trend allows marketers to capitalize on the growing popularity of SVODs (Read on to learn about SVODs) and the shift towards ad-supported tiers, allowing them to reach a wider audience and drive better results. By fully utilizing CTV through programmatic advertising, marketers can stay ahead of the curve and drive better ROI for their campaigns.

In recent years, there has been an explosion of growth in the world of Connected TV (CTV) advertising, with more and more advertisers turning to this platform to reach their target audiences. This growth has also been driven by the rise of programmatic advertising, making it easier than ever for brands to buy and granularly target through CTV inventory. As a result, CTV has become a highly effective way for advertisers to engage with consumers in a highly targeted and personalized way. In this blog, we’ll explore the explosive growth of CTV in the last year, how to fully utilize this platform through programmatic, and the opportunities and challenges this presents for brands looking to capitalize on this exciting new trend.

SVODs – Subscription-Based Video On-Demand Services

One of the major driving forces behind the CTV advertising trend has been the explosion of subscription-based video-on-demand services (SVODs). These platforms, which include household names like Netflix, Disney+, and HBOmax, have basically revolutionized the way we consume television and movies, offering viewers convenience and choice. Since Netflix first introduced streaming services in 2007, they have emerged as one of the most dominant players in the space, boasting over 225 million subscribers worldwide. And while many SVODs offer ad-free viewing experiences, their impact on the broader CTV ecosystem cannot be overstated.

Omdia’s research shows that online video subscription services will reach 1.7 billion in 2023, representing a growth of 143 million. With economic uncertainty around every corner, this is an impressive trend that is bucking the expectations of many. With this growth of SVODs, advertisers can reach consumers in unprecedented ways.

AVODs – Ad-Supported Tiers

One of thIn 2022, these popular SVODs launched AVODs (ad-supported tiers of their services for less money than their ad-free versions). This put them on the same playing field as apps like Paramount Plus, Hulu, YouTube tv, and others.

While SVODs are experiencing a great growth year in 2023, ​​the emergence of platforms with both SVOD and AVOD/FAST (free ad-supported TV) is opening up inventory to advertisers. Disney+ and Netflix have launched lower-priced ad-supported tiers, giving cost-conscious consumers lower-priced options in an uncertain economy. AVODs also allow marketers to access new, engaged audiences. 

AVOD tiers and FAST channels are a much-needed additional revenue stream for media companies looking to bolster finances in a rocky market. Companies are focusing on RPU (revenue per user) instead of chasing subscribers for the sake of flashy stats. 

From the advertising perspective, AVODs focus on getting the viewing experience right. The focus is on getting ad loads and frequency capping right, with pushback coming as either completely disengaging from the platform or going with an SVOD option instead. The future of ad tiers is promising, and more companies are realizing that advertising can be a useful tool to provide relevant content to their community, while also driving profitable revenue and giving customers options.

How to Use the CTV Explosion to Grow Your Business