If you follow the connected TV (CTV) landscape, you’ve likely noticed a consistent trend over the past few years: it continues to exceed expectations. This is largely due to a media landscape where the momentum swings decidedly in favor of streaming.
We saw a milestone moment in July 2022 when US streaming TV viewership eclipsed cable TV for the first time ever according to measurement firm Nielsen. Advertisers, eager to follow consumers’ eyeballs and purchasing power, have responded by piling into CTV advertising at an increased rate. While this may be an expected outcome, industry analysts have been caught off guard by just how fast CTV ad spend is increasing.
“Once again, we raised our CTV forecast in our latest update,” said Ross Benes, senior analyst at Insider Intelligence. “We expect US CTV ad spend to exceed $21 billion [in 2022] and $26 billion [this year].”
This isn’t due, in part, to more inventory coming online. The end of 2022 saw major players Netflix and Disney+ launch their ad offerings. Mid-tier streaming services have seen significant ad growth as well, suggesting a fairly even distribution of good fortune across the industry.
Performance marketing is boosting CTV revenues
Clearly there is massive demand for CTV among advertisers. As more inventory comes online, the money is ready to meet it. But whose money, exactly?
Direct-to-consumer (D2C) brands, for one. MNTN has hundreds of active D2C brands on its platform, and has seen a strong uptick in budgets dedicated to reaching streaming viewers and driving measurable results. According to MNTN’s internal data, these brands increased their total ad spend 384% between Q1 and Q3 2022, and 2023 is looking to play out in a similar fashion.
With the rise of CTV, TV advertising has experienced a bit of a demographic shift. While CTV has traditionally been a space for massive brands focused on awareness strategies, its digital DNA has opened the door for a wider variety of advertisers. The ability to target specific audiences and then measure specific outcomes tied to the ads viewers see has made CTV a viable channel for those who historically shied away from the TV screen. This includes challenger brands focused on growth, B2B companies, and brands that have dedicated part of their budget to performance marketing channels like paid search and social.
The majority of advertisers on the MNTN platform are first-time TV advertisers. They see an opportunity to drive performance metrics like return on ad spend and cost per acquisition just like they would on paid social. This could explain research findings published by MNTN and Digiday in which 41% of surveyed marketers pulled budgets away from social media to spend on CTV.
2023 will set new records
CTV advertising is in an advantageous place right now. Social media’s continued troubles may prove to be another catalyst for outcome-focused advertisers to shift budget to CTV. As we move further into 2023, we’ll see ad technology advances that unlock even more utility on CTV. Combined with ever-increasing viewership and more inventory, it’s safe to say that we’re primed to see a steady stream of headlines proclaiming some new height for CTV in 2023.
Learn how MNTN has helped brands maximize the potential of CTV and request a demo today.
—Ali Haeri, Vice President, Marketing, MNTN
For more CTV trends, check out eMarketer's “What's Behind Connected TV's $21 Billion Ad Spending Boom?" snapshot, made possible by MNTN.
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