The dynamics of the CTV (Connected TV) market have fundamentally changed over the past two years due to the dramatic increase in viewership that CTV has enjoyed since the beginning of 2020. With CTV growing and evolving, brands with less formidable budgets have an opening to strategically drive performance while tapping into the most powerful branding mechanism in the world.
While it’s true that consumers’ behaviors have altered in many areas of their lives since early 2020, one of the most significant is the greater portion of media time that is being spent with streaming TV services. As advertisers scrambled to adapt their media spending to the changing circumstances of the pandemic, they didn’t overlook this seismic shift. eMarketer estimates that CTV U.S. ad spending grew by 40.6 percent in 2020 to more than $9 billion. That growth is accelerating this year, with CTV ad spend projected to hit $13.41 billion, a figure which is forecast to more than double by 2025.
The majority of activity is occurring in programmatic channels, which makes CTV far more accessible to challenger and midmarket brands than broadcast and linear buys. This year, U.S. programmatic CTV ad spending is projected to grow 54 percent to hit $6.73 billion, and that is expected to increase another 29 percent next year to $8.67 billion.
CTV Advantages for Smaller Brands
In light of these trends, it’s not surprising that the world’s largest advertisers have begun to take note of the importance of CTV within their overall media mix, but many remain primarily focused on linear broadcast advertising and are only investing marginal dollars toward CTV audiences. For the biggest brands, CTV is still seen as an add-on, a way to incrementally extend their audiences beyond the hundreds of millions they already reach with linear buys.
The opportunity that CTV represents for challenger and midmarket brands is very different, where it can serve as an equalizer for those which have largely been locked out of traditional TV advertising due to budget constraints. By enabling smaller-scale buys that are targeted and addressable, CTV presents a solution that can level the playing field by driving performance in competitive markets. Even without broadcast-level budgets, brands can drive share of voice in a strategic manner to reach the correct audience, and integrate that seamlessly with their online programmatic spend.
The CTV ad space continues to evolve, and bigger brands will continue to pivot their budgets in this direction. However, the digital and programmatic nature of this market, paired with increasing audience and inventory, mean that these competitive advantages for challenger and midmarket brands can remain strong. In the coming years, this increasingly equalizing opportunity should fuel the competitive brandscape to evolve and diversify as well, with tomorrow’s category leaders likely to emerge in the CTV advertising space.
Want to Know More About CTV Advertising?
If you’d like to learn more about CTV and the equalization it can represent for your brand or clients, feel free to reach out. We would be happy to connect you with a campaign strategist who can work with you to figure out how to make these opportunities work best for you.