With companies like Hulu and Amazon producing their own highly popular shows while offering cord-cutters new ways to experience television, connected television (CTV) and over the top television (OTT) are creating new opportunities for brands looking to add to their multichannel advertising portfolios.
Where CTV is any television that’s used to stream video via the web (think Smart TVs or gaming consoles), and OTT is video content that’s served to viewers via traditional television systems (HBO Now, Hulu, Amazon Video), both provide an effective and efficient way to reach a broad audience.
Millennials and Generation Z are especially big users of both CTV and OTT, but other generations have also caught onto the trend. Tied to their mobile phones, tablets and connected TVs during the pandemic, consumers as a whole like to be able to “cut the wires” and enjoy content on their own terms.
This opens the door for creative marketers that want a highly accountable advertising medium that can be targeted to specific demographics.
Achieving the previously impossible
Marketers using CTV and OTT are in a league of their own right now. Even though Unruly Research reports that 42% of US consumers are spending “a lot more time” watching CTV content since the start of the pandemic, marketers’ media plans lag in this area. For example, 3.4% of US marketers’ total ad spending will go to CTV in 2020—a number that’s project to rise to a paltry 4.7% by 2023.
This represents a missed opportunity. For example, CTV advertising performs better than linear TV across key indicators—and that ad-supported CTV users are 71% more likely to tell a friend about a brand, 53% more likely to search for a brand and 48% to have an improved opinion of a brand they saw on CTV. Also, 73% of US consumers would rather watch their favorite TV show for free with ads.
Marketers that buy CTV media are actually buying audiences and those audiences’ behavioral propensity towards certain activities, likes, dislikes and so forth. This allows the company to drill down and get much more specific with its targeting. This is especially important to younger generations who like relevant ads
With 70% of ads being viewed on CTV, the OTT landscape continues to grow due to its affordability and ease of watching from myriad devices. “US consumers’ pivot to CTV is an opportunity for brands to reach audiences at scale in a highly targeted, personalized way,” said Unruly’s Terence Scroope, “that has, until now, not been possible.”
Experimenting with the new
According to ClickZ, Gen Z is a good starting point for anyone dipping a toe in the waters of CTV and OTT, mainly because this generation is open to trying new brands and experimenting with new products. Plus, 70% of Gen Z and 72% of Millennials watch TV and consume media content on both CTV and OTT. Even better, 54% of Gen Zers like watching ads or non-skippable commercials.
With 80% of U.S. homes having at least one connected TV device, and 64% having three or more such devices—and with such a small percentage of companies already playing in this medium—marketers making their moves into the space now will be well positioned for the post-COVID world and what follows it. With viewers across all generations consuming and engaging with CTV and OTT content in their own ways, the opportunity is not only vast, but it’s also a very affordable, efficient way to find your next customer.