Beyond trends: The evolution of CTV

This article originally appeared in Dutch over at Adformatie. Read the original here.

After years of being portrayed solely as a ‘trend’, 2020 was the year when consumers worldwide proverbially cut the cable from their linear television and opted en masse for video consumption via connected TV (CTV). The catalyst was COVID-19. Driven by curiosity about the current status of CTV, changing viewer behavior, and technological advances, VIA managing director Saskia Baneke-Delfgaauw sat down with CTV expert Tim Samsom, Country Manager Netherlands of ShowHeroes.

Tim, before we get into the thick of it: There are quite a few different definitions of CTV circulating. What does CTV mean to you personally, or to your team?

Indeed, there is still confusion about what CTV stands for, but it’s actually quite simple. CTV stands for Connected TV. This refers to television sets that are connected to the internet, allowing users to access online content, streaming services, apps, and other interactive features right from their television screens. For example, CTV allows viewers to stream videos from platforms such as Netflix, YouTube or Hulu, as well as access social media, news, games and more, all from the same device on which they can watch traditional television programs.

On Wednesday, April 17, we published the Ad Spend Study 2023 – it’s expected that like with previous years, online video will be one of the fastest growers. According to researchers, its growth accelerated during the pandemic because during this period, consumers’ online behavior changed permanently. Do you think that’s also why CTV has risen so quickly in popularity?

Absolutely. After years of being portrayed as a “trend,” changing viewer behavior and technological advances have now (finally) ensured that the smart TV is more firmly entrenched in the connected living room than ever before. Consumers are watching less and less TV at regular broadcast times: they decide what content they watch and at what time. In Europe’s five largest markets – Germany, the United Kingdom, France, Spain and Italy – four out of five households stream video content via CTV. Of these CTV viewers, a mostly younger and generally harder-to-reach audience, 91% watch the ads that are shown around these online videos.

Do you see any other differences in the adoption and use of CTV between different geographic regions? How do they affect how you see the market and developments within CTV?

In the beginning, the biggest growth came from younger audiences, but we are now seeing growth across all ages and demographic groups. Some countries are advancing faster than others for different reasons, but one trend we are seeing in all markets is more growth and more opportunities for advertisers.

Looking at the Dutch market, what do you think CTV’s biggest opportunities are compared to other digital advertising platforms?

TV has always been an incredibly powerful way to tell a story and reach an audience in a lean-back environment, but with our research into user behavior in CTV, we’ve seen that features like the sheer amount of choice on CTV makes the platform even more engaging than traditional TV. CTV’s place at the center of the home and behaviors like “second screening” also provide the opportunity to extend the user experience with QR codes, voice commands, and so on, making it a place to build your brand but also offering users ways to take action.

And what are the challenges?

Fragmentation is a major challenge. The CTV market has a huge range of publishers and devices, which makes it difficult for advertisers to deliver a cohesive, targeted campaign at scale. That’s why ShowHeroes provides support by consolidating CTV offerings with targeting, creative, and measurement services across the portfolio.

Measuring CTV campaigns is also seen as a challenge. How do you measure effectiveness and which KPIs do you find most relevant?

The standard KPI for CTV is VTR, but at ShowHeroes we work with a number of measurement partners to measure our campaigns at a deeper level. That includes measurements such as incremental reach, brand uplift, attribution, and attention.

What developments within CTV do you think the industry should keep an eye on?

There are an awful lot of developments going on, but I think one big one is the huge increase in the number of devices and publishers making the move to CTV, making the available offerings even richer and larger in scale. Another trend to keep an eye on is Free Ad-supported Streaming TV (FAST) channels. These mimic the traditional TV format with a linear, predetermined schedule, but are available through CTV apps. These are becoming increasingly popular with users and, therefore, advertisers. Furthermore, I see a lot of creative innovation in CTV in particular, with formats such as QR codes, personalized animations, and Voice Command Branded Players increasingly being used to extract even more engagement from CTV campaigns.

Final question: What’s the future of CTV?

I expect that in the future we’ll no longer be saying “CTV, but simply “TV,” as it’ll become the primary way for users to consume TV content. Furthermore, I expect to see even more creativity and more opportunities for users to shop directly through CTV ads. The possibilities are vast and I look forward to playing a role in the evolution with ShowHeroes.