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As connected TV (CTV) rapidly becomes the dominant method for consuming television, it also has become\u00a0the fastest-growing ad channel in the U.S.<\/strong>, accounting for\u00a0one in every 10<\/strong>\u00a0dollars spent on digital advertising, according to Emarketer<\/em>. In fact, U.S. brands alone spent more than $28 billion<\/strong> on CTV advertising last year, making up one-third<\/strong> of the total amount of money spent on TV advertising as a whole.<\/p>\n Perhaps most impressive though, is that many of the advertisers spending that money are companies completely new to the world of TV advertising. Historically, TV advertising required deep pockets and large upfront commitments, but with the rise of CTV, smaller brands are increasingly able to incorporate television into their marketing strategy.<\/p>\n \u201cDigital-first marketers, outside of the Fortune 500, generally have made their businesses on the internet,\u201d added Peter Hamilton, Senior Director of Ad Innovation at Roku<\/strong> in an interview with Retail TouchPoints<\/em>. \u201cBut all these folks are starting to become very curious about CTV. One, because they need diversification and they\u2019re looking for new channels that can provide it<\/strong>. Two, it has all the same markers that they\u2019re used to in buying digital media. And three, access is getting easier and it\u2019s becoming more democratized.\u201d<\/p>\n In fact, Ali Haeri, SVP of Marketing at CTV performance marketing platform MNTN said that 90% of the brands using the MNTN platform are first-time TV advertisers.<\/strong> <\/p>\n \u201cThe legacy TV networks have been dealing with the same 100<\/strong> or so brands for like 40, 50<\/strong> years because the price of admission was so high to advertise on linear TV,\u201d he said in an interview with Retail TouchPoints.<\/em> \u201cSo when they see the volume of advertising that MNTN is bringing to their TV networks, they\u2019re like, \u2018Who are all these companies?\u2019 There are all these growth-stage ecommerce companies that are incredibly savvy digital marketers. <\/strong>Now that whole subset of the market is doing TV advertising, and they love it because it looks, feels and smells just like all the other performance marketing channels that they\u2019ve been using. But it\u2019s totally new to a lot of these legacy TV publishers.\u201d<\/p>\n Dig deeper into the brave new world of CTV advertising in our <\/em>free special report<\/em>, <\/em>Making Connected TV an (Even More) Meaningful Part of the Advertising Mix.<\/em><\/p>\n In fact, one of CTV\u2019s biggest advantages over linear television is how familiar the buying and targeting process feels to digital marketers.<\/p>\n \u201cThere are all these auxiliary complications to running linear TV campaigns that led to it being perceived as being inaccessible, whereas now [with CTV] it\u2019s self-serve,\u201d said Haeri. \u201cAudience targeting looks like it does on social; reporting is granular \u2014 this is the language of a performance marketer<\/strong>,\u201d he noted, and because of that \u201cwe look at CTV as a performance marketing channel, similar to the other performance marketing channels that advertisers use,\u201d such as search, social<\/strong> and display<\/strong>.<\/p>\n Case in point: 90%<\/strong>\u00a0of CTV advertising currently is transacted programmatically, according to Emarketer<\/em>. \u201cIt\u2019s way more affordable for someone now to come into this environment in a pay-as-you-go campaign; just a couple thousand bucks to go in, start a campaign, see the results and scale from there, rather than a big upfront commitment with a linear TV campaign that\u2019s hard to measure,\u201d said Haeri.<\/p>\n With digital channels like social media and online search now crowded to the brim with advertising, CTV also presents a new space for advertisers to play and spread out their investments. \u201cThese performance-oriented marketers have been buying on search and social for some time, but in some cases, they\u2019ve reached a plateau of how much they can spend in those channels,\u201d said Roku\u2019s Hamilton.<\/p>\n \u201cThey also want to diversify and not be dependent on just a couple of players, so they\u2019re looking for alternative channels that provide return on ad spend and can be always on,\u201d Hamilton added. \u201cCTV has the opportunity to do that because it has a lot of the same hallmarks as search and social in terms of control over targeting, measuring the outcomes and being able to do it at scale through digital tools.<\/strong>\u201d<\/p>\n \u201cCTV fits so nicely into media plans because clients need the additional reach,\u201d added Brooke Weller, SVP of Digital Media and Analytics at digital marketing agency REQ in an interview with Retail TouchPoints<\/em>. \u201cMeta ads, Google ads, even Reddit ads are all getting so saturated; CTV is going to help lower your total cost per cost per mille (CPM) impressions<\/strong>, because you\u2019re getting so many more eyeballs on it than you could ever get via Meta ads. Add in that CTV can be a huge multiplier because you\u2019re getting the brand awareness \u2014 there\u2019s a halo effect \u2014 and you\u2019re getting so many eyeballs on your brand that you would never have gotten.\u201d<\/p>\n There\u2019s still one knotty challenge for smaller brands: the creative. An ad on television carries prestige, but it also demands a certain polish that can be expensive to achieve.<\/strong> However, even that is shifting in the new world of digital.<\/p>\n \u201cYou don\u2019t need to think of video commercials as being what they used to be,\u201d advised Hamilton. \u201cConsumers are used to seeing more authentic types of ad creative<\/strong>; they\u2019re used to seeing influencers breaking the fourth wall and talking to them about something \u2014 it\u2019s okay for that to happen in television, and we encourage it.<\/p>\n \u201cAnd in fact, marketers in general are becoming more comfortable with video because of social<\/strong>,\u201d Hamilton added. \u201c[The dimensions] might be 9\u00d716<\/strong> instead of 16\u00d79<\/strong> in terms of landscape versus portrait, but it is a video medium and they have become fluent in video ad creative, so the muscle is already there.\u201d<\/p>\n Moving into CTV does require marketers to shift their video production strategies, though: \u201cGone are the days when you could spend a year planning a video or pay $5,000 to $25,000<\/strong> for one video and put all your eggs in that basket for the whole year,\u201d said Weller. \u201cThese platforms need you to refresh your creative once a month<\/strong>. But there are companies now [that can help you] create and pump out video at scale. You need to figure out how to film once and chop that into like 12 different videos.<\/strong> There are also a lot of creators that do really high-quality videos for decent prices.\u201d<\/p>\n Additionally, \u201cthere are lots of different creative services now that can take existing creative and translate it<\/strong>,\u201d said Hamilton. \u201cOne partner that we work with is Spaceback, which takes a social post and turns that into a video for CTV. You can tag onto what\u2019s working for you, what\u2019s viral for you and bring that over, and it\u2019s not an expensive thing to produce.\u201d<\/strong><\/p>\n AI also is coming into the picture, with tools that allow brands to produce video more cost-effectively or to easily modify existing assets for seasonal occasions and different platforms. But it\u2019s advisable to tread lightly with the use of AI \u2014 consumers can be touchy on the subject, as Coca-Cola learned late last year.<\/p>\nFamiliar Mechanics in an Unfamiliar Channel<\/strong><\/h2>\n
CTV Presents a Diversification Opportunity for Digital Marketers<\/strong><\/h2>\n
The Challenges with CTV Creative (and Some Solutions)<\/strong><\/h2>\n