Reaching the unreachable with CTV
Opinion
There’s a lack of understanding of CTV’s scale and value, even as people are watching more content on screen. This presents a great opportunity for brands.
What does watching TV mean to you?
Not so long ago, it meant sitting down in front of the telly in the living room to watch the latest soap, talent show or blockbuster, or whatever the TV schedule had to throw at you.
With the advancement of streaming services, this has changed considerably, with Gen Z in particular now looking away from linear broadcast TV.
Less than half (48%) of 16- to 24-year-olds tune in on an average week, according to Ofcom’s Media Nations 2024 report. And it continues to change, with more people than ever now watching services such as YouTube via the TV or using the TV for gaming, TikTok and more.
The challenge now is that the boundaries of what is TV and what isn’t are getting ever blurrier.
And this has knock-on effects for TV advertising. Investment has grown, with revenue in the space now rising for the first time since 2021, according to research from Thinkbox, and streaming services contributed more than £260m to the UK TV market.
Adapting streaming models
Streaming services are performing exceedingly well. Netflix ended 2024 with 302m memberships, according to its Q4 earnings, and Disney reported 125m Disney+ subscribers in Q1.
But while Netflix’s members are a tempting audience, historically brands have had limited opportunities to reach them with content. In the UK, roughly 20m households are subscribed to a streaming platform, with 17.1m subscribed to Netflix. However, just 28% of Netflix’s UK audience opt in for ads. For Disney, it’s just 5.2%.
If executives from Netflix and Disney could jump in a time machine and head back to the start of Covid-19, when streaming services entered their first major growth era, it’s highly unlikely we’d see them pick the same operating models.
Rather, they would probably eschew the pure-subscription approach and introduce an advertising model to their viewers, similar to that of Amazon Prime Video, where all viewers should see advertising.
Instead, subscription services (SVOD) like Netflix and Disney are playing catch-up and increasingly falling victim to trends like subscription cycling.
For consumers, this is a great cost-effective way to binge-watch the content they want and then move on to another service, until the next hit show comes out. For SVOD services, this is less than ideal. The end result is a moving audience that can’t consistently be reached with ads and isn’t loyal to the brand.
Untapped opportunity
Enter connected TV (CTV) and the TV home screen.
CTV, but more specifically the TV operating system, offers home-screen ad placements. These native formats act as a gateway for brands to address the unaddressable — audiences who have shifted to paid SVOD services — by offering native video and display placements to capture audiences as they start their content journey.
Yet it remains a relatively untapped, nascent resource. People are spending more time watching content online than ever before. New research has found that 13% of Brits spend more than 1,460 hours streaming a year. But investment hasn’t always followed those eyes online.
In spite of large numbers of viewers watching CTV, the perceived scale and value isn’t there. Part of the problem for brands and agencies is quality control and measurement. Where are ads actually being seen and what actually constitutes CTV?
There is a dangerous lack of clear definitions in the CTV space and there is a lot of inventory that might be categorised as CTV without it being a genuine and quality ad placement associated with TV.
For example, you might access a gaming app on your smart TV and happen upon an ad. Is that a quality placement for that brand? Is it adding value and driving business at the mid-funnel level? Many brands lack confidence in CTV to deliver a like-for-like experience with linear TV that justifies moving adspend.
But there is an opportunity for brands to get ahead and, against the backdrop of an exciting agenda of sport, more brands are taking the plunge.
For many, live sport is the last bastion of linear TV. It draws mass attention from fans and is still considered a real-time collective viewing experience. In the US, we’ve seen flagship sports broadcasting events, as well as sports entertainment, shift on to streaming platforms and for big money — think WWE Raw on Netflix ($5bn).
And the UK is beginning to follow suit. The BBC reported that the opening match of last year’s men’s Euro tournament was streamed 3.5m times on iPlayer and Amazon has secured the rights to broadcast the Champions League and Premier League in recent years.
Audience habits have fundamentally changed and it’s likely that this shift is only the beginning. Amid the women’s Euros, it’s up to brands to commit and follow the eyes of viewers on to online platforms.
Coherent messaging
Outside sport, there is a thriving ecosystem of quality content and services, so the best advice for advertisers is to start testing and invest now.
There is no better time to get involved in CTV. It’s not an overly competitive market in terms of supply, the rates are accessible and plenty of providers are developing solutions to support wider measurement frameworks. The trick is to build consistent brand awareness across screens.
TV advertising is already very impactful, but the next step is to connect all avenues of advertising into one cohesive brand messaging. Creative drives two-thirds of media effectiveness, so the next step is to create one pathway of ads across screens, using CTV as a base to drive awareness through quality content on second screens into digital, supported by newspapers and linear TV.
People may think the golden age of television is over, but I see a renaissance — a new golden age of TV advertising is on the horizon for savvy brands that invest well.
The future of the TV is being developed now. While there are hygiene factors that need to be addressed to bring clearer definitions and transparency for advertisers, it is a space rippling with opportunity.
Dan Black is UK head of CTV at Teads