Cynopsis Special Report: Premion Q&A: Charting 2024’s Path for CTV Advertisers
As we head into the final stretch of 2023, the advertising outlook is looking up as brands seize opportunities with increased consumer spending during the holiday season and into the new year — and CTV remains a bright spot, attracting a growing share of ad dollars.
We sat down with John Vilade, the Head of Sales at Premion for his reflections on the state of CTV advertising in 2023 and what lies ahead for 2024, as we gear up for a busy election season and the thrill of the Olympics.
As we reflect on 2023, how would you characterize the CTV landscape?
Let’s start by examining what’s happening with consumers. As an industry, we need to pay greater attention to their needs. Consumers today have access to more streaming TV options than ever before, and they are navigating a vast landscape of content and services, which can be overwhelming. Nearly every streaming provider now offers ad-supported streaming options, and the FAST (Free Ad-Supported Television) services have seen rapid growth. All of this adds to the ongoing complexity that advertisers must grapple with.
Having just watched ‘Back to the Future’ on Broadway, it reminded me of media these days. As I reflect on our evolving landscape, it feels as though we’re simultaneously in 1985, 2005, and even 2025, with the way the industry is evolving. In 2023, we’ve witnessed a year of resilience and growth in the streaming industry. Our own 2023 CTV/OTT Advertiser Study validates this trend: two out of three advertisers using CTV/OTT planned to increase their spending this year.
This is an exciting time for advertisers to leverage the growing opportunities in streaming TV, as they now have greater access to brand-safe premium inventory, sophisticated audience targeting and advanced measurement tools to help them drive their businesses.
Has advertising caught up with the growth in streaming TV viewers?
I have to say no. And it’s not just because I’m an ad sales guy. Consider this: Today, nearly 40% of U.S. households can only be reached through streaming TV.* What’s more, CTV accounted for a 15% to 23% share of total CTV and TV ad inventory between 2021 and 2023 but CTV’s share of total viewing was higher, between 34% to 40%, according to a recent Insider Intelligence article. So, advertisers have to pay more attention to allocating their investments in terms of efficacy. And streaming offers remarkable effectiveness with an array of tools for targeting and attribution.
At Premion, we work with thousands of advertisers and hundreds of agencies across the U.S. and our sellers are fusing linear plus streaming as a regular part of our business. Advertisers are looking for substantial advantages in streaming that may not be as accessible through linear. However, it’s crucial to use both in tandem. Without CTV, traditional TV advertisers are missing a significant portion of audiences, including cord-nevers and cord-cutters. Additionally, a substantial audience comprises occasional linear TV viewers who primarily consume content through CTV. So, it’s essential for advertisers to incorporate CTV into their integrated media plans for effective reach. In the end, TV is TV — and we must eloquently and intelligently bring linear and streaming together, including measurement and make sure that outcomes become the center of the universe for advertisers.
Do you think in 10 years, TV will still be what it is today?
Let’s revisit the past: 1975 was the era of broadcast, 1985 saw the rise of cable, 2005 marked the age of IP and online video. Now, these elements are converging. Change is the one constant we can rely on. Consumers have wholeheartedly embraced streaming for its choice, convenience, and control over their viewing experience. It’s clear that we’re not regressing.
What’s more, there’s a misconception that you can’t reach older audiences through streaming, but that’s not true. While 18 to 34-year-olds have been strong advocates for streaming, our advertisers are seeing success in reaching the 65+ demographic. Measurement will play a vital role in bringing all these elements together. Investment strategies need to be standardized, considering factors like reach and frequency across various platforms.
What are the most notable advertiser trends for this year?
We see a growing advertiser emphasis on driving full-funnel outcomes, whether it’s driving brand awareness or measuring the impact of CTV campaigns on driving consumer engagement. And for local advertisers, closed-loop attribution, driving website visits and sales conversion are top priorities as they’re focused on ensuring that their ad dollars effectively drive business outcomes.
Another noteworthy trend is the increasing importance of integrating CTV into a complete TV strategy, as noted by our survey. In fact, three out of four CTV/OTT advertisers view CTV/OTT advertising as an extension of their linear TV strategy. Additionally, two out of three advertisers believe that combining linear TV with CTV/OTT advertising enhances brand awareness and improves overall ROI performance across the marketing funnel.
This year, combating ad fraud and ensuring brand safety have been major concerns in the industry. Our own survey told us that 87% of advertisers consider brand safety a priority in their CTV/OTT advertising planning and strategy, with nearly 40% considering it a top priority. Additionally, 84% of advertisers are concerned with ad fraud in their CTV/OTT advertising, with over 30% being very concerned. As responsible custodians of valuable investments, we must maintain our focus on these areas. Are we achieving the desired outcomes? Are we delivering campaigns as planned? Is our approach brand-safe, free from fraud, and fully transparent?
What’s driving more ad dollars into CTV?
Advertisers are looking for the most effective ways to reach new and existing customers — and to ensure that their ad dollars work harder with minimal waste — and CTV is undeniably the most effective channel. There’s magic to it, which we at Premion refer to as the superpowers of streaming. Targetability, measurability and relevancy are key superpowers. We delve deep into audience taxonomies, going beyond demographics, focusing on performance-driven strategies. For instance, geotargeting is a key component of every campaign we run, ensuring precise targeting down to the household level and we can marry that with specific behaviors, interests and even audience-first persona targeting approaches. More importantly, we’re focused on driving outcomes and one way that we’re demonstrating the power of CTV is with brand lift studies. Across our advertisers, we’ve found that many are seeing positive results with ad recall, favorability, brand awareness and purchase intent. To that end, Premion’s superpower lies in aggregating audiences across providers and platforms, while the superpower of streaming is its unparalleled targetability, measurability and relevancy.
2024 brings both the busy election season as well as the Olympics. What are the implications for sellers and advertisers?
For sellers, they must gain experience in both linear and streaming to stay relevant. Clients need to catch up quickly, whether through testing streaming outcomes or integrating streaming into their campaigns, as there’s growing viewership and streaming audiences have disposable income.
Next year, we have the El Nino effect of the Olympics and political events happening simultaneously, driving increasing demand for premium advertising inventory. Streaming is poised to be a game-changer in the 2024 elections, aiding the approval of down-ballot measures and enabling local engagement like never before. As such,
races in the swing states of Michigan, Georgia, Arizona, Pennsylvania, Wisconsin, and Nevada will need to fully embrace streaming to effectively deliver their campaigns.
Furthermore, in the political space, dynamic creative testing is crucial. It applies to fundraising, straw polling, and evaluating how well your creative content resonates in the streaming environment. Testing and learning will be essential.
Another key consideration for political marketers is the co-viewing aspect of streaming. Household decisions are rarely made in isolation; they involve spouses and family members. We cannot underestimate the potential of co-viewing in the political sphere within the streaming context. Consequently, the ability to reach people through streaming will determine the outcome of elections. Also, if linear is underperforming, streaming can fill the gap.
Where do you see the biggest growth opportunities in 2024.
Advertisers will need to invest in more personalization to better connect with consumers and deliver more relevant experiences, I recommend to all of our advertisers to start exploring the use of dynamic creative in CTV campaigns, such as embedding QR codes with specific localized and personalized call to actions. CTV has become an interactive platform with an audience that anticipates and embraces interactivity, particularly within the younger demographics. There is a level of permission for this kind of engagement.
Looking ahead to 2024, advertisers need to anticipate the impact of the Olympics and political events on inventory. These events tend to draw a substantial amount of attention and can affect viewership. As a result, advertisers should consider planning ahead and securing inventory in advance. While upfront investments are not the usual operating model for local advertising but are more common for national spots, we recommend adopting this approach.
To elaborate further on the topic of local advertising, we’ve all seen the headlines discussing the viability of local advertising. It’s important to emphasize that local advertising is far from dead; in fact, it is experiencing growth. You might wonder how local is growing, especially when television station ratings are declining. The key to understanding this growth lies in the shift towards streaming. If you’re selling streaming and you’re focused on audiences and delivering value for your clients, local’s growing. There’s a ton of geotargeted inventory available — streaming plus linear equals success.
In closing, what are your three key takeaways for 2024?
Convergence is not a passing trend; it’s already here and here to stay. Brands can no longer afford to just focus on linear TV advertising. If you’re considering an investment that brings together streaming and linear, you’re on the right track. However, even with this shift, there’s still more work to be done in educating the marketplace about the advantages of streaming TV and the new capabilities it offers in targeting and measurement.
Across agencies, there are still internal battles on who should take ownership of streaming. Agencies must strive to make it easier for their clients. Is it a digital or a television discipline? Make it easier on the clients to understand where they’re gaining the most value and the most efficacy in terms of buying.
CTV is not only a smart but a necessary investment. Stay educated on developments and keep your head on a swivel in 2024. This would be my best advice.
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* MRI-Simmons 2023 August Cord Evolution. © MRI-Simmons 2023. The data herein derives from a confidential, proprietary syndicated product owned by GfK US MRI, LLC.