Advertiser demand for CTV keeps growing right along with the increase in CTV audiences. With higher demand and more advertisers looking to get in the game, understanding the ecosystem and measuring the quality and performance of CTV buys becomes even more important. That’s why we’re breaking down the common myths of CTV advertising to bring you the truth.
First, to clear up any confusion, CTV is not synonymous with OTT. CTV is a television set connected to the internet to enable streaming video content on a large screen, either through a smart TV, streaming device, or gaming console. That big-screen, lean-back, immersive experience is unique to CTV, while OTT could be viewed on smaller screens such as mobile or desktop.
Now, on to some of these surprising truths.
1. CTV is for everyone
Perhaps the most-voiced challenge of CTV is scale. At SpotX, we’ve watched CTV move from an early adopter technology to the early majority phase of consumer adoption. It has now truly reached critical mass with 40% of US adults and 50% of internet-enabled and TV households in Europe watching CTV.
Contrary to the popular belief that CTV is for digital natives and millennials, our recent CTV viewership report also shows that the audience is extremely diverse, with a median age of 45 in the US and 43 in Europe. CTV viewers include all ages, ethnicities, socioeconomic backgrounds, and family compositions.
2. Ad-supported content has high viewership
As streaming behaviors have matured, so too have attitudes towards streaming services and ad tolerance. Often when content consumption and CTV are discussed, the assumption is that CTV viewers spend all of their time streaming ad-free content like Netflix or Disney+. While it is undeniable that most CTV viewers regularly watch Netflix, our study found that 4 out of 5 US streamers and 7 out of 10 European streamers watch ad-supported programming.
Most subscribers in the US spend between $4 and $29 a month on their streaming subscriptions, and 80% did not intend to increase their spending in the next 12 months. CTV viewers are looking for ways to increase access to content without increasing cost, which opens the door to higher growth for ad-supported content. In fact, 60% of US CTV viewers and 58% in Europe would prefer to watch free content versus paying for an ad-free service.
3. CTV is measurable — but there are challenges
CTV presents a lean-back, immersive experience for viewers which inherently transfers to the ad impressions, where spots are typically less interactive, usually non-skippable, and are running during broadcast-quality programming.
So, these impressions have different measurement characteristics than what we’ve adopted for desktop and mobile, which does present new challenges. For instance, CTV standards and app naming conventions are still nascent, the available inventory signals and overall technology adoption are both somewhat inconsistent, and demand for CTV impressions outstrips the supply.
Still, CTV is measurable now. SpotX and DoubleVerify recently hosted a webinar, “CTV Myths and Realities,” in which DoubleVerify shared that 25% of all of its measured video impressions are occurring on CTV devices. Almost 45% of those CTV impressions originate via programmatic buying channels. Advertisers can — and should — start measuring CTV as part of a cross-device approach to better identify fraud, gain transparency into where ads are running, and improve impression quality.
4. CTV is not inherently premium
Just because CTV is delivered on the big screen, doesn’t mean it’s brand-safe, premium or fraud-free by nature.
Matt McLaughlin, COO of DoubleVerify, explains, “All of the characteristics that drive advertiser demand into the high quality CTV inventory space lead to high CPMs, and if there’s one thing we’ve learned over the last decade of identifying fraud, it’s that fraudsters are capitalists and attempt to make as much money as possible. The way they do that is by transacting in environments where they’re going to earn the highest CPMs. We’ve seen a tremendous increase in the amount of fraudulent activity that is taking place in the CTV space and the capabilities around measuring it.”
Invalid traffic manifests in a couple of ways: fraudulent CTV apps that generate false ad impressions, and by manufacturing or spoofing impressions that are originating outside of a CTV device in a server farm or elsewhere. It’s important to have a robust validation mechanism to ensure the impressions you’re buying aren’t fraudulent.
A common assumption is that all CTV inventory is broadcast-quality content. That’s not the case, and there is outdated, user-generated content (UGC), adult content, and pirated or non-licensed content that you want to avoid. Ensuring fraud-free and quality inventory begins in the app store. While some app stores are tightly regulated, others are more open and allow almost anyone to make apps available, which is where brand safety concerns arise.
The buying environment is extremely important in preventing fraud. Buying directly from the device manufacturer or media owner cuts out any go-betweens that aren’t providing value and drastically reduces the potential for fraud as compared to indirect sources. This is one of many steps SpotX takes to increase overall quality and transparency, and as you can see below, DoubleVerify shows that SpotX’s IVT rankings are 96% lower than the rest of the programmatic ecosystem that they see today.
Follow the audience and craft your CTV strategy now
TV consumption habits have evolved over the last several years as more people leave pay TV behind in favor of streaming services. The number of non-pay-TV or streaming-only households in the US reached 48.9 million (eMarketer) and CTV households grew to 70 million in 2020 (Comscore).
One-third of all TV households in America are streaming-only and cannot be reached through traditional TV. There’s similar growth in Europe, where CTV reaches 61.5 million households and 56% of CTV viewers cite it as the primary way they watch television.
CTV is an attractive opportunity for advertisers to efficiently engage these audiences that are otherwise hard to reach.
About the author
Nick Frizzell is the Vice President of Inventory Quality & Planning at SpotX. During his nearly decade-long tenure at SpotX, Nick has focused on ensuring marketers have full transparency into the supply chain and can only access high quality, fraud-free, and brand-safe inventory, while protecting media owners from becoming victims of bad actors. He and his team are also responsible for ensuring compliance with industry standards such as the IAB Tech Lab, TAG, and others. Nick is a recognized leader in the industry and provides education, tools, and resources to ensure bad actors are not only banned from SpotX, but removed across the industry. Nick is a native of Colorado and graduated from Fort Lewis College. Outside of the office, Nick spends most of his time with his wife, daughters, and two dogs enjoying all that Colorado has to offer.