Blog Post

CTV: The Next Frontier

January 14, 2020 - Sierra Ducey

2019 was a busy year for CTV, or Connected TV, as Apple TV+ and Disney Plus entered the streaming Olympics. More consumers are continuing to cut ties with linear TV (think standard television sets with ads and scheduled shows) and embrace internet-backed entertainment. These new launches mean big things for consumers, streaming competitors such as Hulu, Netflix, and YouTube, and most importantly, advertisers. These new platforms will continue to revolutionize when, why, and how messages are communicated to potential consumers – and if advertisers aren’t kept up to date with these new trends, their messages won’t be enjoyed, let alone received. Keeping up with CTV – or staying ahead of it – will bring profitable rewards for brands willing to tackle ad-free frontiers.

CTV is a murky field chock-full of questions. How do messages reach consumers through TV nowadays? Are ad-free platforms here to stay? What are advertisers supposed to do? These are questions being considered as linear TV quickly fades into the background. But as consumers, we trade in this confusion for excitement. Ad-free entertainment is pretty incredible, especially considering we can binge watch hours of TV shows without distraction. But what happens if ads start appearing one day? Will CTV be as luxurious as it is now? The future of TV is an open field that is slowly but surely being constructed. Read on to learn more about this new mode of entertainment and how it’s evolving, especially with the most recent launch of Apple TV+.

What is CTV? And what’s so special about Apple TV+?

CTV is any TV device that is connected to the internet. It can be a smart TV, a game console device with TV or streaming viewing options, or any TV that offers streaming viewing in the form of Netflix, Roku, Hulu, YouTube, and so on. Some of the platforms routed to consumers through CTV (in this case, Netflix, Disney+, and Apple TV+) do not allow ads. Others, such as Hulu, are ad-free if you choose to pay more per month. Otherwise, ads are there. And these ads, transpired to consumers through internet-backed devices, can be powerful. If consented, advertisers can analyze data about CTV viewing habits and programmatically place targeted ads to those watching in seconds. With more relevant ads being placed in front of consumers, the annoyance associated with traditional TV is removed.

Programmatic ads sound incredible for advertisers and consumers. Unfortunately, the new Apple TV Channels and Apple TV+ platforms are entirely ad-free. In fact, the brand isn’t even collecting any data about streaming. Instead, recommendations are served solely based on a so-called “combination of human curation and on-device processing.” Ad-targeting for non-existent ads, in other words, isn’t even possible. And the viewers for Apple TV+ keep growing, especially as those purchasing new Apple devices get an entire year of viewing for free. For advertisers hoping to advertise, doing so via Apple devices gets a bit tricky.

How can advertisers reach CTV viewers on ad-free platforms?

For now, ad-free platforms are untouchable. Ad-supported CTV options, however, are incredibly profitable, especially with the use of programmatic content. So,it isn’t all doom and gloom from here. According to the Trade Desk’s Co-founder and CEO, Jeff Green, all streaming providers will need to explore ad-funded models in the near future. Linear TV viewers are shrinking and more streaming platforms are being launched. Pricing is now a leading factor for consumers when it comes to deciding which services to subscribe to. And by being ad-supported, a platform is able to serve content at a much lower price per month.

With profits from advertisers, streaming platforms will also have the ability to launch more compelling, original pieces of content for viewers. Bringing in ads, (especially programmatic ads)  means major rewards for streaming services, streamers, and streaming advertisers. It’s because of these favorable outcomes that CTV advertising is expected to surpass $10 billion by 2021. Though things may be a bit confusing now, the future of connected TV is incredibly promising. Learning more about it now rather than later is integral. Coming across this post, combined with past blog posts regarding Emerging Digital Channels and Advertising with Connected TV, are strong steps in the right direction.

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