In the past year, our lives have transitioned to a mostly online presence, powering a digital revolution. Connected TV (CTV) and over-the-top (OTT) has taken over the linear TV experience, as we've moved past video-on-demand (VOD) to everyday programming, movies, live streams, and so much more.
Unsurprisingly, advertising has followed suit. According to eMarketer’s Q3 2020 Digital Video Trends report, CTV advertising in the US has increased 25% in 2020, with ad-supported video-on-demand (AVOD) revenue up 31% and digital upfront TV ad spend up 11%, despite the downturn in traditional TV advertising.
To better understand what the months ahead hold in store, Verizon Media conducted a survey with 152 digital advertisers to gauge their ad spending plans for H1 2021. Spoiler alert: things are looking up, with 57% of digital advertisers planning to increase spending.
We found that while CTV/OTT spend has increased, there is a significant opportunity for advertisers to include these channels in their marketing mix. Fewer than 40% of advertisers have spent on CTV/OTT channels in the past year, significantly lagging behind social media, display, and non-CTV/OTT video.
Forecasts for spending on OTT/CTV in Q4 2020 and H1 2021 are promising, with 16% of advertisers planning to significantly increase YoY spending on CTV/OTT in Q4 and 22% planning to significantly increase YoY spending in H1.
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The share of advertisers utilizing CTV in H1 2021 isn’t changing much. However, 60% of those that are spending plan on increasing their investments. This suggests CTV/OTT is proving to be an effective part of their media plan.
An unexpected appetite for emerging formats like DOOH
We were surprised to learn that CTV advertisers are nearly two times as likely to spend on digital-out-of-home (DOOH) versus those who are not CTV advertisers. The link between the two is expected to grow, with 68% of CTV advertisers planning to increase DOOH spend in H1 2021.
This shows us that certain advertisers who are already seeing the benefits of CTV are more willing to take risks on another emerging format. Having the ability to spend both CTV and DOOH in the same omnichannel demand-side platform (DSP) allows marketers to manage and optimize in one place.
When it comes to measuring success, marketers are feeling comfortable with the shift to new means of measurement from legacy video metrics such as KPIs that better capture CTV/OTT and DOOH. KPIs like viewability, ad completion rate, and video completion rate that have been used for display and desktop video that have 1-to-1 user ratios. As CTV/OTT and DOOH are 1-to-many ratio, advertisers are evolving their ads and measurement strategy accordingly, and are seeing success.
These findings paint an optimistic picture for the next couple of quarters. At Verizon Media, we’re helping publishers and advertisers push their budgets further with the latest research to drive your digital decision-making and the latest solutions to improve the experience of our partners and consumers.
—Mike Petrella, vice president, global partnerships, Verizon Media
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