The 2020 pandemic fast-tracked the already growing Connected TV (CTV) and digital advertising industry. The number one reason for this shift is the steep subscription price1. While the adoption of video streaming is accelerating, traditional TV subscribers are in a steep decline, losing 6.2 million customers in 20202.
This shift in viewership made CTV the best place to consume video content. “So many people have cut cable out of their life,” said Brandon Courtney, Director of Business Development. “Some younger people have never even had a cable subscription. Where are they going? Connected TV and OTT.” This article will outline the dos and don’ts of adding CTV to your OTT advertising mix.
Streaming Boom Accelerates the Adoption of CTV
CTV is one of the fastest-growing channels. The number of households with Smart TVs is expected to increase over the next four years, with over half of the U.S. population owning a Smart TV3. “Advertisers will follow these patterns and continue to allocate ad dollars wherever their target audience is consuming media,“ said Courtney.
YouTube and CTV have experienced a massive popularity growth4 as millions tune in, making it the number two streaming service and the number one OTT platform in the U.S.4 Advertisers can tap into the audience’s inspiration and passion for their targeting tactics. As a result, YouTube CTV ad spending will increase by 34.2% in 2022, according to a recent projection from eMarketer. Native advertising has been around for years, but industry developments in the pandemic era allowed this format to grow dramatically. According to a recent projection from eMarketer.
“CTV ads have replaced broadcast ads,” said Brennah Kentz, Senior Account Manager. Data shows that Over half of U.S. Agencies and Marketers are shifting their TV budgets to OTT/CTV this year (2021).
Brands can communicate their message and achieve better results with a more prominent creative format through CTV campaigns. “They are also far less expensive to run and can reach a diverse audience with more specific targeting capabilities than broadcast ads, “continues Kentz, noting that targetability, engagement, and measurability benefit CTV advertising. 5
If you’re considering advertising on YouTube, it’s essential to weigh the pros and cons. Owned by Google, YouTube offers a large variety of data to target by demographics, locations, interests, search keywords, and more. As a result, ads on this platform possess a high completion rate, such as NonSkippable Videos at 90% completion, YouTube Bumper Videos at 90% completion, and YouTube TrueView Videos at 50% completion. In addition to that, YouTube offers bidding strategies based on the advertiser’s goals.
On the flip side, a limitation of YouTube CTV ad worth noting is the inability to target specific channels and genres. However, the large Google audience inventory makes up for the loss.
“People who are viewing YouTube on CTV are likely glued to their couch, so I would recommend NonSkippable when targeting CTV Devices on YouTube so the advertiser can capture their attention.” Said Kentz. “I would also recommend adding a frequency cap here to make sure you don’t annoy the audience with too many of your ads at the same time.
“CTV is fantastic for brand exposure and recognition: it has high view-through rates (VTRs) at 95%+ in and is NonSkippable most of the time. Tailored audience targeting, expanded inventory, and competitive rates are the big winners here.”
Advertising on YouTube TV
YouTube TV is YouTube’s subscription streaming service that offers live TV, on-demand video, and cloud-based DVR from more than 85 TV networks. However, it’s essential to consider that not everyone who watches YouTube on their TV is a subscriber of “YouTube TV,” its member-based service. If you’re looking to develop a successful YouTube TV campaign, advertisers should consider the following limitations.
- Highly specific and limited target audiences – only include selected few vendors in the U.S.
- Content limitation – excluding YouTube Embedded, Live, and Game content.
- It’s not possible to target specific YouTube TV channels.
- No remarketing or custom lists.
- No 13-17 age range.
Best Practices for CTV Advertising
As viewers shift their interest to YouTube on CTV, advertisers’ interest in reaching those viewers is also growing. Our team recommends these best practices to stand out from the crowd and make the most out of YouTube CTV:
- Creative: “Most TV ads perform best when real people and faces are in the ads, accompanied by fitting popular music. Lastly, drive it out of the park with a strong call-to-action and finish with a brand recall. The ad should be short and concise (30 seconds or less), repeat the brand name to strengthen brand recognition,” said Kenz.
- Selective Inventory: “Be selective and align your inventory with content that will resonate with your target audience,” said Courtney.
- Find Your Audience: “The closer you can get to your ideal audience, the more you will be able to stand out in front of other advertisers. Targeting users based on the types of content they view on YouTube is a great method to add into your media mix,” said Taylor Coleman, Senior Account Executive.
See our YouTube one-sheeter to learn more about our offering and follow us on LinkedIn to stay up-to-date on the latest industry trends! Contact the Division-D sales team to learn more about YouTube Ads and how we can support your campaigns.
3. eMarketer, 2021, 4. eMarketer, 2021, 5. eMarketer, 2020