Brands are rethinking their CTV strategies as the channel matures

Sponsored by Nexxen • May 15, 2024 •

Chance Johnson, Chief Commercial Officer, Nexxen

CTV has been a driving force in the media and advertising industries for years, but the conversation has shifted as challenges and barriers have eased. Recently, CTV has become less of a gamble for both broadcasters and brands.

In the past, concerns about quality inventory, audience reach and content fragmentation across CTV platforms have made it challenging for advertisers to execute cohesive campaigns and effectively reach desired audiences.

However, recent developments — including the expansion of premium inventory and the introduction of ad-supported models by major platforms — have transformed CTV into a more reliable and lucrative advertising channel. Brands and advertisers are beginning to recognize the immense potential of this medium, and CTV is emerging as a reliable and profitable means of reaching audiences, signaling its ascent as a leading channel for marketers.

Major platforms are investing in CTV as a leading advertising channel

For instance, Amazon has begun leveraging its unique shopper data to enhance advertising offerings on its Prime Video platform, and this strategy has been paying off. By introducing ad-supported tiers and investing in premium content, the mammoth tech group is not only positioning itself as a formidable presence in the CTV ecosystem but also attracting new advertisers who are increasingly interested in incorporating this content into campaign plans.

And other major platforms have taken note.

Netflix and Disney+ have introduced ad-supported models to diversify revenue streams, underscoring the increasing power of CTV as a top advertising channel. This has prompted brands to rethink their strategies and allocate budgets accordingly.
In February, Disney+ also announced plans to join forces with Fox and Warner Bros. Discovery, offering a new, bundled sports streaming service and a standalone ESPN+ app for bundle subscribers. This consolidation of sports content and partnership among broadcasters is yet another indication that CTV’s moment has arrived — it has become the next leading channel for sports fans and brands.

Premium CTV inventory is becoming more widely available for advertisers

Quality CTV inventory was constrained until recently, predominantly purchased directly from broadcasters rather than through programmatic channels. Broadcasters could offer premium content and exclusive inventory bundled with linear TV. However, as large streaming platforms have launched ad tiers and FAST services such as Tubi and Pluto have continued to grow, quality inventory has become more widely available, leading to increased programmatic buying and more efficient CPMs.

Of course, none of this is to say that there isn’t an outstanding degree of hesitation around investing in CTV. CTV is relatively nascent compared to linear, and questions remain around defining premium CTV content. But the reality is that premium content is whatever audiences want to watch.

Advertisers are seizing the CTV opportunity

These recent developments have significantly altered the CTV landscape for the better. What was once considered a risky investment is now seen as a lucrative opportunity for broadcasters and brands alike. Initiatives such as ad-supported tiers and bundled sports streaming services signify a paradigm shift in consumer behavior and preferences, indicating that CTV is starting to lead the pack.

Despite lingering, and perhaps unwarranted, concerns surrounding quality, the fundamental truth remains: CTV caters to diverse audience interests, offering a versatile platform poised to redefine television advertising. As the industry continues to evolve and innovate, one thing is clear: The era of CTV has unmistakably arrived.