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From FAST channels to co-viewing, CTV advertising will look different in 2024

December 2, 2023
in Technology
From FAST channels to co-viewing, CTV advertising will look different in 2024
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In a year marked by diverging and evolving economic signals, the streaming industry has shown remarkable resilience and growth. 

Advertisers have embraced streaming TV. For example, Premion’s 2023 CTV/OTT advertiser study found that 2-in-3 advertisers using CTV/OTT planned to increase their spending this year. 

However, advertisers still have not caught up with the pace of growth in streaming viewers: CTV accounted for a 15%–23% share of total CTV and TV ad inventory between 2021 and 2023, but CTV’s share of total viewing was higher, between 34%–40%, according to analysis from Madison and Wall.

Looking ahead to 2024, BIA projects CTV/OTT to be the fastest-growing media channel, with an increase of 39.5% in ad spend from 2023. This robust growth not only underscores the efficacy of CTV in driving full-funnel outcomes but also highlights the expanding capabilities available to marketers. They now have greater access to brand-safe premium inventory, sophisticated audience targeting and advanced measurement tools to help them drive their businesses. 

The 2024 election cycle and the upcoming Olympics are further intensifying the demand for premium advertising inventory. Marketers playing catch-up must act swiftly, either by testing streaming outcomes or incorporating streaming into their media mix, given the growth of streaming audiences with disposable income.

FAST channels are emerging as the dominant streaming growth driver

Free ad-supported television is growing dramatically. According to Parks Associates, U.S. ad-supported streaming households surged to 41% in this year’s third quarter, up from 31% in Q1 2023. 

What sets FAST channels apart is their inherent consumer appeal — and free is especially enticing for consumers when there is economic uncertainty. This consumer-friendly model has contributed to its widespread adoption across generations. 

The popularity of FAST channels extends beyond entertainment and has played a pivotal role in extending the reach and life of local news. However, from an advertiser perspective, it’s crucial to consider the brand safety element. Not all inventory on FAST channels is created equal depending on the media buying approach, especially if marketers are buying programmatically or on open exchanges.

CTV advertisers should not undervalue co-viewing

Linear buyers understand co-viewing well, as viewers per viewing household (VPVH) has long been used to determine audience viewership in linear TV. However, co-viewing is often and unwittingly overlooked by CTV advertisers. 

As marketers and agencies increasingly seek a deeper understanding of effective CPMs (eCPM) and how co-viewing influences engagement, impressions will rise in importance. Advertisers should actively consider the value-added benefits of co-viewing and its impact on eCPM and engagement metrics. If eCPM is the actual value of the delivered ad units, streaming audiences should be measured in their totality. 

More importantly, co-viewing is linked to premium content and enhances engagement — and Premion’s study found that more than half of CTV/OTT advertisers agree that co-viewing is a value-add benefit of CTV/OTT advertising and provides a like-for-like comparison to linear TV.

Trusted and brand-safe, fraud-free inventory is table stakes in 2024

This year, the industry has had significant concerns about combating ad fraud and ensuring brand safety. 

According to Peer39’s 2023 Programmatic CTV Benchmark Report, ads from Fortune 500 companies account for 45% of ads on CTV channels that are either fake or feature brand-unsuitable divisive or false content. Premion’s study revealed that 87% of advertisers consider brand safety a priority in their CTV/OTT advertising planning and strategy, with nearly 40% considering it a top priority. 

Marketers and their vendors must maintain their focus on these areas. Are the desired outcomes being achieved? Are campaigns being delivered as planned? Are ad approaches brand-safe, fraud-free and fully transparent? 

Working media cannot afford to chase audiences into dark alleys, especially in an uncertain economy. In 2024, there should be no ambiguity in upholding this standard of investment. In a modern media planning and buying strategy, advertisers shouldn’t be taking any risks around fraudulent inventory, brand-impairing adjacencies or opaque sales channels.

Streaming advertising will be mission-critical in every election war room in 2024 

Streaming TV will be crucial for reaching voters in the 2024 elections, and swing state races that embrace its geo-targetability will be most effective in delivering their campaigns. 

Political advertisers are already leveraging first-party data — including voter files, donor lists and supporter information — alongside third-party data for precise CTV targeting. The availability of dynamic creative capabilities takes this a step further, enabling personalized CTV ads and hyper-localized content to drive engagement and prompt action, such as delivering candidate information via QR codes to a voter’s phone or prompting volunteer sign-ups for phone banks. 

Political campaigns should double down on the advanced targeting capabilities, efficiencies, waste elimination and crucial linear extension that streaming brings for the 2024 cycle.

Premium aggregators are boosting campaign reach and scalability

The most powerful reach in streaming comes through aggregation, and it also helps solve frequency issues.

Marketers may resort to disparate buys across multiple publishers and walled gardens to achieve the necessary scale and reach. However, this approach raises challenges related to cross-platform frequency management and reach limitations beyond the subscribers of these platforms. By working with trusted premium aggregators that have curated many direct connections to premium inventory, advertisers can simplify their media buying and ensure their campaigns achieve reach and scale.

The evolution in CTV capabilities has transformed streaming advertising into an essential channel, whether marketers want to build brand awareness, inform voters or drive sales conversion. As 2024 takes shape, savvy advertisers are considering changes in viewing habits and preferences and recognizing the value of premium aggregators to unlock the full potential of ad-supported streaming to connect with audiences and drive outcomes that matter most effectively.

Sponsored by Premion

https://digiday.com/?p=527241

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