12 CTV Advertising Trends in 2023

As the digital landscape continues its constant evolution, keeping up with key trends across channels, including connected TV (CTV) advertising, is both important and challenging. For advertisers looking to capitalize on CTV’s tremendous reach and engagement potential without overextending their budget, gaining insights into emerging trends can help shape future advertising strategies.

Understanding CTV has become essential for today’s performance marketers as they seek to drive increased ROI from campaigns in 2023 and beyond. In this blog post, we’re taking a moment to consider what we’ve seen so far in 2023, checking in with 12 cutting-edge trends you should know if you plan to take advantage of CTV platforms for your next big advertising campaign.

The world of CTV is rapidly changing, bringing new advertising trends that will affect how brands reach their audiences. Through the remainder of 2023 and beyond, advertisers should be prepared to adjust their strategies to fully benefit from the following key trends in CTV advertising:

1. Rapid Growth for Ad-Supported Options

Consumers are rapidly shifting away from traditional viewing habits, which has caused an increase in CTV viewership. This shift gives advertisers a unique opportunity to reach viewers through ad-supported options. Through ad-supported options, streaming services can offer free or low-cost content to the viewers while advertisers pay for sponsored slots and product placements. This allows CTV streaming services to quickly increase their user base while providing valuable services to advertisers.

This trend is expected to continue throughout 2023, with more streaming services offering ad-supported options and increasing revenues. Netflix, a previously ad-free platform, is now offering an ad-supported tier that allows users to access their library of content for a significantly reduced cost of $6.99 per month. Disney+ also offers an ad-supported tier of their platform that allows viewers to access content for a low cost of $7.99 per month. 

As more of the population becomes cord-cutters, CTV advertising is expected to grow substantially, providing a much more effective way to reach viewers. This is especially true for advertisers targeting baby boomers, who make up an increasing number of the streaming population. Ad-supported options offer a low barrier of entry for viewers, serving as the first landing point for cord-cutters. This allows advertisers to get in front of potential customers early.

This trend is further bolstered by a drop in traditional cable and linear TV viewership, making ad-supported options more attractive to advertisers than ever before. Ad-supported options offer various ad formats, such as pre-roll videos, display ads, and interactive overlays. This adds to a powerful advertising opportunity for businesses in 2023 and beyond.

2. An Increase in Ad Rates

2023 has already been an incredibly dynamic and competitive year for CTV advertising as ad rates continue to rise. Ad rates refer to how much companies will have to spend to get their advertisements seen. With the rapid increase in viewership on streaming services, many companies are willing to pay high rates for their ads. This means companies must be ready to increase their ad budgets accordingly to compete and succeed in the CTV advertising atmosphere.

Moreover, advertisers can expect higher ad rates as the streaming industry continues to expand and evolve. This is because a larger audience means companies can reach more potential customers and charge more for their advertisement slots. As more companies enter the CTV advertising market, competition for ad space will continue to increase, and ad rates will rise even further.

The effectiveness of CTV advertising over traditional TV advertising is also pushing the ad rates up as companies focus on ROI. Companies can now measure how well their ads perform in real-time and adjust their ad budgets accordingly. This means companies can target their ads to the right audiences and are willing to pay more to get a higher return on their investment.

With rates and competition rising, it’s more important than ever to partner with digital marketing experts who can help navigate CTV and ensure that your budget is fully optimized, so you can be confident that you’re reaching the correct audience and get more out of each spend.

3. Greater Focus on Reaching the Target Audience

Using sophisticated targeting techniques, such as precise demographic and geographic targeting, is essential for CTV advertising in 2023. Advertisers will have to focus on reaching their desired target audience with precision and accuracy rather than simply casting a wide net. By understanding their audience’s demographics, interests, and behaviors, they can ensure that the right people see their adverts at the right time.

With a diverse and segmented audience, creating and customizing ads for different users is necessary. Advertisers must tailor their messages for each demographic or target group, increasing the impact of their campaigns. The use of metadata is important for CTV ads today, providing more accurate and detailed information about their target audiences. Using this data, advertisers can deliver more refined and effective campaigns that are better targeted at their desired audience. 

Advanced data analysis and machine learning will also be used to better understand audience trends and behaviors, allowing more personalization of campaigns. This data-driven approach will give advertisers more control and insight into the performance of their campaigns.

4. More Automation

Automation is necessary for quickly and efficiently scaling and optimizing campaigns. Over the next few years, automated processes will become more advanced and prominent in CTV advertising, allowing developments such as dynamic creative optimization and impression-level frequency capping. This will provide digital marketers with an easier way to dynamically tailor their campaigns based on the target audience, resulting in greater engagement and a higher return on ad spend.

Automation will also enable marketers to be more agile with their approach, making it easier to make changes or adjust campaigns quickly. With CTV ad spending expected to skyrocket over the next few years, automation will play a major role in helping marketers keep up with the demand while still maximizing their efforts.

Key areas of automation that advertisers should keep an eye on include automated bidding, dynamic creative optimization, and impression-level frequency capping. Utilizing these tools will allow marketers to better target their campaigns and maximize their ROI. 

5. Streaming Services Will Continue to Grow in Popularity

With the growth of streaming services, this trend is predicted to continue. Streaming services allow viewers to watch their favorite shows and movies from the comfort of their homes. People can choose from a wide variety of constantly updated content, making it easy for viewers to find something new to watch.

The increasing popularity of streaming services has also made it easier and more affordable for advertisers to reach their target audiences. Advertisers can target specific demographics with their ads, and viewers can easily watch the same content on multiple devices, such as mobile devices, smart TV, or set-top boxes.

6. More Platform Acquisitions

As the CTV advertising industry grows, more platform acquisitions will occur. The acquisitions are geared toward integrating different technologies and services to increase the value of CTV advertisements. For example, companies are likely to acquire platforms that specialize in data and analytics, content syndication, and audience targeting. Both industry and non-industry players will drive the acquisitions to gain more control over the CTV ad space. This will enable these players to create new and innovative ways to reach their target audiences.

More acquisitions are a testament to the potential of CTV advertisements. Companies can access better technologies and services, increasing viewer engagement and having more precise targeting capabilities. The growth in acquisitions will increase the resources and competencies available to CTV advertisers, helping them maximize the potential of their campaigns and ultimately reach more viewers.

7. More Ad-Supported Video on Demand (AVOD)

With more people spending time online, Ad-Supported Video on Demand (AVOD) is becoming one of the top trends in advertising. AVOD allows viewers to watch video content free of charge, supported by ads. As advertisers capitalize on the growing popularity of streaming services and reach their target audiences, AVOD is becoming an attractive option.

Moreover, the first-party data collected from these services can be used to target ads more accurately and track their effectiveness. This data can be used to customize ads, allowing advertisers to tailor their messages specifically to their target audiences. Furthermore, AVOD provides viewers with a more diverse range of content and can be used to reach audiences who may not have access to other streaming services.

8. SVOD Will Still Be Outpaced by Connected TV

Connected TV advertising is expected to continue its rapid growth beyond 2023, outpacing even the most established streaming video on demand (SVOD) services. This trend is driven by the expansive reach of CTV across multiple platforms and devices, its audience targeting capabilities, and cost-effectiveness. CTV enables marketers to reach vast numbers of viewers and target and segment audiences for more effective campaigns.

Connected TV also offers interactive and immersive ad formats, such as dynamic ad insertion (DAI), interactive overlays, pause ads, and so-called “shoppable ads.” These formats make CTV highly engaging for viewers and help drive deeper connections between brands and consumers.

9. More Efficient Ad Spend

Advertisers are always seeking ways to maximize the impact of their ad spend. As we move into the end of 2023, this trend is expected to become even more important as businesses face increasing competition for consumers’ attention. Advertisers will be looking for ways to target their audiences more effectively and measure the impact of their campaigns.

The use of data-driven tools and Artificial Intelligence (AI) will become more commonplace. AI can help uncover new insights from large datasets, enabling advertisers to develop more personalized and targeted campaigns. Advertisers can also track the performance of their campaigns more accurately in order to make data-driven decisions about where to reallocate resources. 

10. More Programmatic Technology

As we look beyond the end of the year and into 2024, newer programmatic technologies will continue to come into play. Programmatic technology makes buying advertising more automated and streamlined, allowing advertisers to buy many ad impressions quickly and efficiently. This technology uses machine-learning algorithms to determine what ads are more likely to be effective and automate the media buying process. As a result, advertisers can reduce their media costs while reaching the right people at the right time.

Today, programmatic advertising benefits from the integration of new technologies, such as AI-driven data science tools and custom bidding algorithms, which can increase their efficacy and further customize approaches to individual campaign goals and strategies. This also enables real-time optimization of campaigns, helping marketers more effectively adjust their campaigns to ensure maximum performance. As these continue to advance, their effective application will become necessary to remain competitive.

11. Convergent Television

Convergent TV strategies are gaining ground as technologies mature and advance, and performance visibility becomes more available across channels.

Convergent TV merges digital advertising technology with linear TV in a balanced system, unifying marketing efforts across traditional linear, CTV, and OTT services. This holistic strategy sees critical benefits not only in bringing more advanced buying and targeting capabilities to traditional television, but also in avoiding oversaturation and enabling retargeting in cross-channel campaigns.

With the incorporation of digital ad technologies, advertisers can more effectively track which consumers have seen ads even on channels that are not traditionally considered to be addressable. This can enable more accurate frequency capping and sequentialized advertising, both on CTV and beyond into the wider digital landscape.

12. Greater Use of CTV Advertising for Consumer Packaged Goods (CPG)

While CTV has seen growth and success across a wide range of verticals, it’s been particularly impactful for consumer packaged goods (CPGs). Advertisers and marketers of CPGs are likely to focus more on connected TV advertising through the remainder of 2023 and beyond. This trend is driven by the growth of CTV viewership and its effectiveness in reaching target audiences. As CTV viewership continues to grow, it provides an excellent opportunity for CPG brands to better connect with their target audiences and create a personalized user experience.

CTV advertising is also highly effective in generating engagement and return on investment (ROI), making it an attractive option for CPG brands looking to maximize their spending. 

What This Means for Your Digital Advertising

AUDIENCEX provides access to the latest in enterprise-level, data-driven ad tech. With industry-leading strategic expertise, AI-enabled data science solutions, award-winning creative, and seamless media access, we power custom acquisition strategies throughout the digital ecosystem. Our custom holistic strategies ensure that every campaign and channel is considered within a wider context to drive improved performance across all touchpoints.

Brands and agencies alike can benefit from our privacy-safe suite of AI tools, empowering programmatic campaigns across channels with predictive audience modeling, custom bidding algorithms, continuous real-time optimization, conversion pathway visualization, and more. We provide transparency and accountability into performance with advanced in-depth analytics and actionable insights presented across all channels in one seamless dashboard.

Our continued commitment to keeping our clients ahead of the curve ensures that we can deliver an optimal CTV ad strategy for your long-term goals. If you’re looking to capitalize on today’s advertising trends, stay ahead of the evolving landscape, and strategically leverage the latest ad tech and advanced data science to drive results for your brand or agency, contact AUDIENCEX today. Our expert teams would love to connect and discuss how we can help you overcome challenges and maximize performance for every campaign.