May 18, 2021

Status Quo in CTV

More and more users are cutting the cord on linear TV. What set off years ago to become a mega trend has finally arrived in households around the globe and was accelerated even further with couch time hitting a record last year during the global pandemic.

Users are shifting away from watching a scheduled program and rather making individual choices on the content they want to consume. In the U.S. which serves as a great reference to market trends in Europe, nearly 9 in 10 people stream content on CTV. [1] A what is more, 91% of these CTV users watch some form of ad-supported streaming video content. [2]

And while market penetration is not as high in comparison yet, Europe is a fast-growing market for Connected TV (CTV) at the moment.

The evolving CTV market landscape

Especially younger and typically harder to reach audiences adopt CTV viewing enthusiastically and show clear preference for the format. [3] This is an excellent chance for marketers to reach new audiences and great potential for further growth. Across Europe’s five biggest markets, 50% of all internet-enabled and TV households can be reached via CTV, representing 61.5 million households. [4]

There is an interesting observation to be made: among CTV users voluntary ad consumption is on the rise: One reason for this is that people prefer the CTV ad experience compared to linear TV. [5] They think that there are features of CTV which make it better than linear TV, such as the ability to skip certain ads as well as shorter and fewer ads which on top are less repetitive. The other explanatory approach is that the market for subscription-based video on demand (SVOD) is likely to reach saturation [6] with consumers developing subscription fatigue. More CTV users quench their thirst for fresh, new content with ad-based video on demand (AVOD). This video content offer is financed by advertising with prominent providers being Rakuten TV, Pluto.tv and TV+ by Samsung. 

What does the Demand side say?

The huge market potential which comes with the growing number of TV-like big screens with Internet connection has accelerated the rise of new advertising options and formats. CTV certainly shines with prices far below traditional TV commercial rates. This is why many advertisers are so keen on entering the big screen via CTV ad selling.

“We are seeing a real run on this format. As younger target groups are turning their backs on linear TV, brands are facing declining reach for their TV spots. Hence advertisers are looking for other options and shift budgets towards online video and Connected TV to reach the desired audiences”, reports Bastian Döring, our Vice President Global Sales.

What does the Supply side say?

On the supply side one can notice quite a heterogeneous landscape. Each supplier has its own approach. And there are difficulties of a wide scope: The devices which count under CTV like Smart TVs, streaming devices and game consoles have very different set ups and functionalities. So the industry is still working on questions about measurement and standardisation. Establishing an agreement across the ecosystem will be key to cope with the emergence of walled gardens in the streaming landscape. 

The VAST standard which is currently employed most of the time is not sufficient for the requirements of the demand side regarding verification and fraud prevention. As soon as broadcaster or publisher first-party data becomes more prevalent it may prove to be the best way to measure campaign performance and success. [7]

Another topic which still drives the industry is consent management. How is it requested and also referred to the various service providers along the value chain? Currently, there are two approaches. Either the hardware manufacturers ask for consent when consumers set up their device or enter the CTV user interface for the first time. Alternatively, service providers specialised in consent management take action on it.

“Publishers are aware of the renewed interest in CTV offerings and are striving to meet the demands of the market. Due to its fragmentation though, it is important to maximize the potential with scalable and uniform solutions and standards. Presenting CTV offers at the highest quality is crucial to create the best possible offer for buyers”, states Dustin Puschmann, Global Director Business Development Supply & Partnerships at ShowHeroes.

The ShowHeroes CTV solution

ShowHeroes is the biggest aggregator of CTV supply in Germany – constantly growing in all the European markets. The available formats include instream video, pre-roll, mid-roll and bumper ads. Thanks to a large inventory +11 mio ad impressions are generated per month with a strong focus on entertainment, food, news, sports and kids channels. 

The principle of contextual relevance is at the heart of the ShowHeroes product portfolio. As the ad serving for CTV meets the viewer’s preference for ads that are relevant to the content being streamed, View-Through-Rates (VTR) above 90% can be achieved.

Make an inquiry if you wish to learn more about CTV with ShowHeroes.

Sources: 

[1] Press Play: CTV and Ads, Integral Ad Science, October 2020, page 4

[2] Press Play: CTV and Ads, Integral Ad Science, October 2020, page 5

[3] IAB Europe Guide to Connected TV, June 2020, page 8

[4] CTV is for everyone, SpotX, 2020

[5] Press Play: CTV and Ads, Integral Ad Science, October 2020, page 7

[6] CTV Guide, Xandr, 2021, page 13

[7] Guide to Connected TV, IAB Europe, June 2020, page 7

Glossary

Advanced TV: The umbrella term referring to any TV content being delivered beyond traditional linear television. Advanced TV describes new digital-like capabilities and impression-based delivery applied to premium video content.

Over-The-Top (OTT): Content distributed directly to viewers over the Internet which encompasses all linear TV or VOD streaming content providers. 

Examples include Netflix, Hulu, HBO, Amazon Video, YouTube, Rakuten TV & Pluto.tv.

Connected TV (CTV): Specific devices within the group of OTT-compatible hardware: TVs that are connected to the Internet.

Examples include Smart TVs, game consoles, set top boxes, Apple TV, TV+ by Samsung & Roku.

Source: IAB Techlab

Different types of Video on Demand (VOD):

SVOD: Subscription Video On Demand (library access charged on a regular basis)

Examples include Netflix, Hulu, and HBO. 

TVOD: Transactional Video On Demand (pay per view basis)

Examples include Google Play and iTunes

AVOD: Ad-based Video On Demand (content financed by advertising)

Examples include Rakuten TV, Pluto.tv, TV+ by Samsung, YouTube and 4OD

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