Over the last several weeks, we’ve explored the state of connected TV from many different angles. We understand where connected TV stands now, but the question remains: What’s next? To answer that, let’s first take a step back.
Connected TV is valuable to advertisers and media owners because it’s incredibly attractive to consumers, offering a degree of control over video content that isn’t feasible for live or linear television. In this respect, the future of connected TV lies in defending that value: giving consumers the power of choice without becoming prohibitively expensive.
That’s where connected TV advertising comes in.
Subscription video-on-demand services such as Netflix and Hulu are undoubtedly popular, but content is far from unlimited and each subscription bears an individual price tag. There is a tipping point past which consumers will be interested in accessing a wider variety of content on-demand, but unwilling to fork over an additional monthly fee to do so. This makes the case for a hybrid model of subscription-based VOD and ad-supported content, allowing consumers to enjoy the specific content they want without breaking the bank.
To expand upon this, as ad-supported content on connected TV grows, media owners must strike the right balance between monetization and saturation. The challenge is to preserve the positive user experience that draws people to connected TV while still generating the ad revenue that’s needed from a business standpoint. The good news is that these two goals are not mutually exclusive. Connected TV advertising comes with a group of unique benefits that set it apart from video advertising on linear TV or online: high viewability, impressive completion rates and enhanced audience targeting provide rock-solid justification for premium pricing on connected TV inventory.
In all, there is still a need in the video industry for a more uniform understanding of the value of connected TV advertising—what it entails, how to scale it and what it’s worth relative to advertising on other devices. But one thing is certain: 2017 will be an exciting year for connected TV and those who invest in it. It’s a movement that may shape the way the next generation consumes video. Either way, we’re excited to be a part of the innovation.
Check out the other articles in this series: