Most brands and agencies (97 percent) expect to invest in connected television (CTV) in the year ahead, and more than one-third believe they are currently investing too little. That’s according to an Integral Ad Science (IAS) and Digiday report, “The State of CTV,” conducted in February and March 2020. The report explores drivers of advertisers’ CTV interests as well as the pitfalls of CTV measurement and targeting.

CTV adoption was gaining momentum before the pandemic; in 2018, eMarketer predicted that 60 percent of the population will watch CTV by 2022. As people continue self-quarantining, interest in CTV has significantly grown, as 90 percent of people say they now have access to a CTV device.

In addition to finding that CTV ad spending is expected to increase dramatically, the data reveals that 10 percent of respondents are currently spending over $1 million on CTV. Twenty-seven percent are currently spending up to $100,000 a year while 10 percent are not investing in CTV advertising at all.

Although 44 percent of respondents say CTV ad spending should be set in the $100,001-$500,000 range, only 28 percent are investing this much. Still, 47 percent say that their CTV budget will be greater than $500,000 a year from now, compared to 36 percent who are already spending that much.

While respondents’ definitions of CTV vary, a majority define CTV as “video content consumed on a TV screen, delivered via an internet connection, including smart TVs and set-top boxes.” Whereas 12 percent define CTV as, “a mixture of both standard free-to-air TV and internet-delivered TV all in one place.”

A majority agree on what CTV entails, but many are confused about who sells specific inventory, slowing CTV adoption for advertisers. “Does a marketer go to a content owner, like NBC Universal or Roku, that aggregates inventory across various channels?” asks Matt Bayer, head of integrated sourcing, at CrossMedia. Bayer says a plethora of ad-network-like offerings exist, contributing to the confusion.

CTV advertising budgets also differ for different segments of the market, though most (38 percent) respondents say CTV is grouped with their digital ad budget. Whereas 29 percent consider CTV a part of their video budget, 18 percent combine CTV with TV budgets and 15 percent see CTV as a standalone budget item.

As for the quality of CTV vs. digital video content, 55 percent say the quality of CTV content is higher. If CTV content quality was to increase, 80 percent say the CTV inventory would become more valuable, 62 percent say it would be more effective and 65 percent say CTV would become a better platform to invest in.

The survey also found that 57 percent of respondents observe CTV engagement levels to be higher than those of digital video. Forty-four percent of brands say that CTV is the platform with the most potential for new video ad innovations, with 51 percent of agencies saying the same. Almost half (41 percent) of respondents say short-form studio-produced content presents the greatest opportunity to engage CTV audiences.

Despite its traction, CTV adoption will require consistent terminology, targeting and measurement. Currently, the top three factors that would increase investment in CTV for brands are improvements in brand suitability (48 percent), improvements in measurement/metrics (45 percent) and transparency in ad placements being purchased (45 percent). For agencies, it’s transparency in the ad placements being purchased (70 percent), improvements in measurement/metrics (66 percent) and the variety of ad placements available (34 percent).

When asked about the key performance indicators (KPIs) measuring successful ad performance on video content, 76 percent of advertisers named time-in-view/completed views, 74 percent named reach/delivered impressions and 57 percent named conversions. Though time-in-view ranks first, the metric for this KPI is fuzzy, as measurement is far behind actual consumer consumption. Uniform measurement across all channels is necessary for linear channel budgets to shift to CTV and advertiser spend to catch up to consumption trends.

Yet until advertisers can address CTV’s frequency-capping issue, measurement and transparency will lag. “Campaign basics, like frequency capping, are not yet the norm with CTV/OTT, and thus over-saturation can become an issue,” says Ben Allison, vice president, global media, VaynerMedia. For example, if consumers are binging a show, they’re being served the same ad repeatedly.

IAS surveyed 105 US respondents from Digiday’s audience, 58 percent of which are agencies and 42 percent of which are brands.