Cynopsis Special Report: 2024 Priorities for CTV/OTT Advertising

2024 has been a standout year for advertising, with the Olympics and the elections driving major ad spending spikes. As we head into fall, Connected TV (CTV) advertising continues to shine bright. To uncover what’s fueling this growth, we spoke with John Vilade, Head of Sales at Premion. John shared insights from their latest 2024 CTV/OTT survey and offered his perspective on what’s capturing advertisers’ attention in CTV, the shift to total TV buying, the boom in political ads, and more.

Your study is a great barometer on the state of the streaming and where the industry is headed.  What’s new in this year’s advertiser survey?

We’ve partnered with Advertiser Perceptions for our third annual Voice of the Customer study. Our 2024 CTV/OTT Advertiser Study dives deep into the concerns and priorities of marketers and agencies regarding CTV sentiment, spending, and strategic imperatives. These insights, along with the on-the-ground intel from our own advertisers, allow us to truly understand and connect with the hearts and minds of local advertisers.

The big headline is clear: Investment and optimism in CTV are on the rise. Three out of five advertisers (61%) using CTV/OTT plan to increase their spending, with an average boost of 21%. This shift underscores a growing confidence in the value and effectiveness of CTV. The increase in spending is fueled by several key factors: the ability to achieve full-funnel objectives (41%), reaching a highly engaged opt-in audience (40%), and precise audience targeting (38%). Among those increasing their CTV/OTT ad spend in 2024, a significant 74% are reallocating budgets from digital, social media, or linear TV. Meanwhile, 26% are tapping into new ad budgets to support this growth.

Your report talks about a shift towards a combined TV buying model. What do marketers need to know about the pairing of linear and streaming TV?

Content is king and distribution is queen, but the true power lies with the consumer—the ultimate judge of what to watch. The consumer holds the key to choice and control. With over 40% of US households only reachable through streaming TV*, combining linear and streaming TV buying has become essential.

So, here’s what marketers need to know about this shift. Integrated buying is the future and our study found that more than half (56%) of CTV/OTT budgets are now managed by integrated or hybrid buying teams. What’s more, four out of five (80%) CTV/OTT advertisers see streaming as an extension of their linear TV strategy. Additionally, seven in ten advertisers agree that combining linear TV with CTV advertising enhances full-funnel ROI (74%), improves ad recall (74%), and boosts brand awareness (71%).

Advertisers need to focus on the total audience — and that means prioritizing CTV as part of a complete TV buying strategy. This integration is not just about reaching a broader audience but also about driving measurable outcomes. Ultimately, CTV offers superior targetability and attribution capabilities, enabling more accurate performance measurement and improved KPIs like brand lift, sales, and website traffic.

Various reports point to the growth of programmatic advertising in CTV. What did your study reveal about programmatic growth?

The rise of programmatic advertising in CTV isn’t really a surprise—it’s been trending that way for a while. Our study found that 50% of CTV/OTT advertising will be purchased programmatically in 2024. A significant number of buyers prefer a programmatic workflow for its ease and efficiency. Agencies appreciate its flexibility for driving performance and margins, whether they’re buying through private marketplaces, directly from publishers, or through open exchanges. We found that our advertisers are increasingly adopting a multifaceted approach to CTV buying, incorporating both programmatic and managed services. The future is about simplifying media buying and delivering the best client experience—so for us, that means offering both programmatic and managed services.

Is brand safety still a top priority? 

Absolutely—brand safety is even more critical in today’s AI-driven world. Political campaigns have highlighted the risks, reminding marketers to be cautious about where their ads appear. Brand safety is the eye of beholder and depending on the brand, marketers need to carefully navigate the risks of where their ads appear.

Here’s what our study told us on this topic. Advertisers are placing a strong emphasis on premium video content (89%), ad fraud prevention (84%), and brand safety (83%) in their CTV strategies. A notable 83% of CTV/OTT advertisers view CTV/OTT as being as valuable as, or even more valuable than, primetime TV, with 36% considering it more valuable.

This highlights just how crucial high-quality content is to them.

Additionally, we know that social media is an area of heightened brand safety concern, and more than half (53%) of CTV/OTT advertisers believe that CTV/OTT provides a safer environment for their brands compared to social media. Additionally, 42% find it more effective for measuring campaign performance and aligning with quality content.

FAST services have been growing massively. What trends are you seeing with FASTs and their future growth?

Don’t overlook FAST services—they’re growing incredibly fast and attracting huge audiences and you’ll often see two or three FAST services among the top 10 streaming viewership rankings every single month. They’re pulling in massive viewership thanks to their free value proposition, user-friendly interfaces and accessible content.

FASTs are a crucial part of the streaming future and we’re only scratching the surface of what they can achieve. Watch this space for more innovation around consumer interactivity, measurement, dynamic creative — and more dynamic ad serving.

Another notable trend is the growth of FASTs in local markets. Many local channels are finding new life in the FAST environment, which is great for diversifying content and extending audience reach. And let’s clear up a myth: there isn’t as much overlap between FAST services like Pluto, Tubi, and Roku as some might think. Research shows that these platforms serve different audience segments. We’re excited to be partnered with some of the leading FAST services in the industry and to see how they continue to evolve.

Local is your sweet spot.  What’s your view of “local” and what matters most for local advertisers?

Local is the heart and soul of our business—and it matters more than ever for advertisers. It’s also complicated, nuanced, and resource intensive. Local businesses often operate with smaller budgets and resources, but the demand for results is universal. Closed-loop attribution, driving sales conversions, and increasing website visits are top priorities for both local and national advertisers. Local advertisers are seeking the same tools and high-quality inventory as those on Madison Avenue, and we’re helping to level the playing field. We focus on educating local advertisers about available tools, democratizing access to sophisticated targeting, measurement capabilities, and premium inventory, while leveraging our unmatched local expertise.

In today’s landscape, local advertising is an amalgamation of linear and streaming solutions. To effectively reach your audience, you need to understand their consumption habits and use the right tools to build efficacy and achieve outcomes. This means investing in excellent pre-sales support, robust operations, and advanced toolkits for targeting, measurement, attribution, and brand lift. We’re committed to ensuring that local advertisers have everything they need to thrive in this dynamic environment. We’ve built our business on the power of local—with our expansive presence and expertise, we understand unique local characteristics, viewer trends, and the importance of local relevance that drives outcomes for advertisers.

On the topic of local let’s talk political advertising. Premion also recently conducted a political CTV survey. What did you uncover?

When it comes to local and political ads, CTV is definitely making waves. Here’s a key insight: 86% of all voters watch ad-supported streaming*. That’s a huge audience right there. Traditional linear and cable were once the go-to for election ads, but now, streaming is becoming a critical player in the political media mix. As we dive into this year’s presidential elections, it’s clear that local geotargeting—like focusing on specific congressional districts and zip codes—is crucial. Streaming is proving to be a powerful tool for reaching voters where they are.

To get a clearer picture of CTV’s role, we partnered with Campaigns & Elections for a survey of political media and campaign strategists. Our findings highlight that CTV is now a staple in media budgets for presidential, federal, and statewide campaigns. We’re seeing an increase in CTV investments as political media plans balance more between streaming and linear TV.

Specifically, 54% of respondents expect a rise in CTV spending for political or issue ads in 2024, reflecting a trend we’ve noticed in the last two election cycles. While linear TV remains important, CTV spending is definitely on the rise.

Digital strategists are increasingly integrating CTV into their plans from the start. In fact, 46% of them use CTV/OTT ads to complement digital media purchases, and 45% use it to both complement digital buys and extend linear TV buys. This shows that political advertisers are making CTV a core component of their overall TV strategy. Almost three-quarters (73%) of political advertisers consider reach and frequency the most important metrics for CTV/OTT ad campaigns, underscoring the value of CTV in achieving campaign goals.

Lastly, as we think about the future, how are you thinking about growth in an increasingly competitive streaming TV market?

Clearly, the market is becoming increasingly competitive — with more CTV inventory available than ever before, more buying options, and more sales reps selling CTV. An important growth driver for us is our collaboration with streaming publishers. They seek trusted partners to help sell more streaming inventory locally and nationally, and we’re continuing to expand and deepen our publisher partnerships.

Technology innovation is another critical area for growth. While we’ve always invested in innovation, our recent acquisition of Octillion has supercharged our ad tech capabilities. Stay tuned for on future developments on how we’re enhancing our capabilities for advertisers.

Read more on Cynopsis here.

*MRI-Simmons 2024 March Cord Evolution: © MRI-Simmons 2024. The data herein derives from a confidential, proprietary syndicated product owned by GfK US MRI, LLC.