CTV Buying Myths to Overcome in the Post-Pandemic Era

July 21, 2021 | By Justin Gutschmidt

Author: Justin Gutschmidt, Head of National Sales, Premion.

Premion’s Justin Gutschmidt explains how the shift toward cord-cutting and streaming while well underway, the surge in streaming audiences during the pandemic has forever changed TV viewing habits. And as streaming growth spiked, so did the proliferation of ad-supported OTT (over-the-top) services and platforms — bringing more media buying options and more complexity for marketers to navigate.

By every measure, streaming TV saw astronomical growth. Connected TV (CTV) and over-the-top (OTT) have become the fastest-growing advertising channels — and we’re now beginning to close the gap between viewership and advertising spend. CTV continues to outpace other formats, and shows no signs of slowing down, according to IAB’s Video Ad Spend 2020 and Outlook for 2021 report, which finds that nearly three-quarters (73%) of CTV buyers plan to shift budget from broadcast and cable to CTV in 2021; advertisers, on average, spent $20 million on CTV in 2020; and more than one-third (35%) of buyers expect to increase CTV video ad spending in 2021. Moreover, eMarketer projects that U.S. CTV upfront spending will double to $4.5 billion this year and $6 billion in 2022, with overall CTV ad spending hitting $13.4 billion this year and $21.4 billion by 2023.

Consumers have embraced ad-supported OTT and ad-based video-on-demand (AVOD) offerings in a major way. In fact, 76% of those who regularly stream video have watched ad-supported OTT, according to IAB. The major media owners are investing significantly in free ad-supported television (FAST) services, such as Tubi (Fox), Pluto TV (ViacomCBS) and Xumo (Comcast), and an ad-supported HBO Max just launched in June joining recent entrants, PeacockDiscovery Plus and Paramount Plus. As such, the U.S. is expected to triple AVOD revenues by 2025, reaching $24 billion, according to Digital TV Research.

As marketers attempt to make sense of the growing array of CTV and OTT advertising options available across many different streaming platforms, the priority should be on understanding the nuances of buying direct versus working with premium aggregators, the role of attribution and the differences in the valuation of impressions between OTT and linear TV. Amidst the increasing fragmentation, it’s important to consider the structural differences between sellers when it comes to inventory quality, targeting, frequency management and measurement approaches.

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