Since the pandemic, viewership from linear to digital-first ways like connected TV (CTV) has continued to grow. This shift has given marketers a fresh perspective on CTV through the lens of digital, as evidenced by a new report from Innovid and Digiday. According to their findings, 64 percent of marketers and agency executives said that the top benefit they’re hoping to gain by adopting CTV is a stronger connection between digital and TV advertising.
With CTV ad spend projected to reach $11.31 billion this year and $18.29 billion by 2024, Innovid set out to understand where marketers stand in their CTV journey including how they measure success, their top challenges and how CTV fits into their omnichannel strategy.
A majority of respondents only recently began investing in CTV. Innovid’s research shows that 41 percent started allocating budget to CTV one to three years ago and 24 percent only started doing so less than a year ago. Meanwhile, another 24 percent are still figuring out how to leverage CTV.
CTV advertising is especially appealing as of late because marketers can incorporate it into their omnichannel strategy. For example, 83 percent of respondents told Innovid they run CTV ads alongside social media. Other existing channels they’re running CTV ads alongside include display advertising (78 percent), mobile video (77 percent), desktop video (67 percent) and linear TV (54 percent).
Respondents said that CTV investment has boosted brand awareness (59 percent) and brand engagement (50 percent) though just 26 percent can credit CTV for higher conversion rates.
Thirty-nine percent said CTV investment has increased return on ad spend (ROAS); 51 percent either don’t know if ROAS was impacted or have seen no change in ROAS.
As Innovid notes, changing consumption habits have shown some brands that CTV can turn TV advertising into a down-funnel, direct-to-consumer and direct response tactic. That’s been the experience for Allergan Aesthetics. The company purchased ad programmatically on Hulu and Pluto TV for its brands Botox, CoolSculpting and Juvaderm.
Its “New Year, Do You” sweepstakes campaigns for Juvaderm and Botox encouraged consumers to scan quick response (QR) codes with their phones for a chance to win $10,000 in products. The result: more than 6.5 million impressions, about 2,000 QR scans and an average video completion rate of 96.74 percent for Juvaderm, and 3.4 million impressions, 60 QR scans and an average VCR of 93.62 percent for Botox.
Currently, the top three key performance indicators (KPIs) that CTV marketers value most are conversions/revenue, reach and brand awareness.
“When marketers incorporate CTV as an extension of their linear efforts, incremental reach could be their core KPI. But if a marketer uses CTV as an entire substitute for linear in a television buy, examining the cost effectiveness of the household reach across an entire campaign would be useful,” said Jessica Hogue, general manager, measurement and analytics, at Innovid.
Some of the challenges marketers have faced in implementing CTV ads include inconsistent measurement (57 percent), targeting the right audiences (53 percent) and inventory fragmentation (41 percent). To better measure CTV ad performance, 68 percent said they’ve partnered with an advertising technology company while 27 percent have hired in-house experts.
Given each device creates its own identifiers, CTV marketers are struggling to analyze the data needed for effective audience targeting. In response to this, over half of respondents are relying on audience targeting tactics and first-party data.
Though device identifiers such as IP addresses can create specific IDs encompassing a household’s different streaming devices, single-source data sets that translate across providers are critical.
As per Innovid, a few ways to enhance CTV measurement include establishing industry-wide metrics and avoiding ad tech providers that have different interpretations of audience reach.
Next, marketers should experiment with measuring different performance goals such as incremental reach, household reach or message frequency then use the ensuing data to inform future strategies. Lastly, Innovid suggests taking advantage of adjusting campaigns mid-flight in order to increase return on investment (ROI).
Even as CTV investment increases, marketers still consider linear an important part of the marketing mix. Fifty-four percent of respondents said linear TV will comprise 1 percent to 24 percent of their mix this year and 22 percent say it’ll account for 25 percent to 49 percent of their mix.
Some marketers have even upped their linear spend—23 percent have increased it from 1 percent to 24 percent in the past year while 16 percent increased it from 25 percent to 49 percent.