Connected television is experiencing an era of transformation: how content and formats redefine the consumption of this medium and what it means for advertising.
From the half king to CTV
Television is the king of media, but in recent years as a direct consequence of the rise of social platforms and the loss of audience, the medium has had to reinvent itself to continue reigning in the new era of content. That’s where the next TV thing comes into play: connected television or CTV.
Connected television is presented as the natural evolution of the TV connection to the internet, moving from classic programming grids to on-demand content catalogues, where personalization is essential to continue attracting audiences. Smart TV, advertising-supported television channels and streaming services thus create a new media landscape, where advertising has also been forced to adapt.
Advertising and the media have developed a symbiotic relationship throughout their years of existence.. In this sense, CTV allows the medium to connect with the audience through their tastes and interests, generating interesting results for advertisers’ campaigns at a time when audiences are more fragmented than ever.
Connected television: a new panorama
According to InfoAdex data, Connected television registered an investment of 82.2 million euros in Spain throughout 2023this represents an increase of 120.9% compared to the 37.2 million invested in 2022, reaching a market share of 4.7% of the total advertising investment on television.
For Alfredo Rodríguez, Paid Media Manager for Marketing Solutions at LLYC, CTV represents an evolution in the way of consuming television, “combining the traditional advantages of offline TV, such as its wide reach and high consumption, with the benefits of digital campaigns.” This allows new opportunities in segmentation and communication for brands, and launches a constantly developing landscape.
As Rodríguez explains, This medium is expected to reach $327 billion in 2026, with a compound annual growth of 21.8% between 2021 and 2026. Boosted by aspects such as the popularity of streaming use, the greater number of connected devices such as Smart TVs, video game consoles and playback devices.
Video as a key format
In a landscape marked by the fragmentation of media consumption and the increase in advertising costs, brands find the task of reaching audiences and connecting with these users effectively more and more difficult. According to WARC, the short video format has become one of the most popular formats today through which consumers and brands communicate.
But, What are the successful formats of connected television?As it explains Enrique ArnaizHead of Research at Smartclip Spain, there is no format that is better than another in this medium, since “activation in CTV allows us to use different formats, which have different capacities and that either combined or separately can complement a communication strategy.
«The video formats themselves have the same capacity for impact that we know from conventional TV. After all, it is the same device and the audience does not identify whether it has been served conventionally or digitally. In any case, the level of attention of the advertising space in which it is inserted could be generating a higher or lower level of attention,” explains Arnáiz. In addition, the professional points out that the L or inverted U formats have the ability to complement video strategies and help communicate the brand and message much more effectively than with video-only exhibitions.
Connected Television Opportunities
Television is a medium with multiple virtues: its authority, the high number of users or the “brand safety” environment it generates are some of the reasons why advertisers continue to bet on the king of media in a digital era. In the case of connected television, one of the main virtues of this media is the greater personalization of the advertisements to which users are exposed. In fact, according to research from the Alliance for Video-Level Contextual Advertising (AVCA), lThe audience pays almost 4 times more attention to CTV ads that are relevant to the content they are watching at a given moment.
In this sense, CTV offers benefits for advertisers such as:
- Audience segmentations: ability to launch impressions to those individuals in a specific geographic area, or who you know consume certain content on their TV, or who have been previously exposed to the conventional TV campaign, for example…
- Measurement possibilities on each impression served.
- More creative possibilities, that are not yet fully exploited, but are growing. Various types of static or dynamic advertising formats can be activated, which best accompany the strategies that each advertiser has.
And for its part, it offers the audience:
- Fewer interruptions and unwanted ads. Unlike traditional television, where advertisements often interrupt programming, CTV allows for a more seamless viewing experience. Ads are displayed in non-intrusive ways, such as commercial breaks or pre-roll ads before the content begins. This reduces the likelihood of viewers changing channels or ignoring ads.
- Consumption of streaming/on-demand content In the new contracting formulas based on advertising content, they improve the audience’s experience with the device, the content and, therefore, with advertising.
The challenges of CTV
Among the main challenges for CTV, Arnáiz highlights the importance of proving that the extra cost compared to conventional television is worth it for achieving some of the objectives sought with communication strategies that include CTV, as well as “making the “Smaller brands, which did not invest in TV, understand that now it is accessible to everyone, locally, with fewer impressions.”
While for Alfredo Rodríguez, the challenge faced by connected Television already existed in branding campaigns, and it is the ability to demonstrate and attribute acquisition results in each. With the growth of electronic commerce and the ability to attribution in digital performance campaigns, we face the essential question every day: What will be the return on investment in advertising that activating this channel will generate? In short, this is our main challenge,” concludes the professional.
