Connected TV (CTV) advertising budgets are on the rise, picking up the slack as linear TV spend declines. However, CTV funds are less likely to be drawn from linear TV budgets as they were a couple of years ago, according to research [download page] from Digiday and MNTN.
As part of the survey of more than 100 brands and agencies, respondents were asked from which advertising lines they’re shifting allocation to support their CTV strategy. Linear TV was cited by just 21% of respondents, putting it 6th on the list. That represents a substantial change from a similar survey conducted in 2021, when linear TV was a source of CTV funding for a leading 58% of respondents.
This year it’s social media budgets that are most likely to be cannibalized, with about two-thirds (66%) of respondents saying that they’re shifting budgets from social to CTV. Next up is email marketing (43%) another change from 2021, when it was in the bottom half of the list (19%).
In other shifts, this year finds paid search more at-risk of ceding budget to CTV, while out-of-home has fallen down the rankings as a source of CTV funds.
Meanwhile, among respondents who are shifting budgets from other advertising lines to CTV, the majority (54%) said that half or more of their connected TV budgets will be derived from those shifts this year. Fast forward to next year, though, and external budgets are expected to fuel less of overall CTV budgets.
Brand First, Performance Follows
When asked the primary goals their teams pursue with CTV advertising, respondents pointed to increased brand awareness (55%) first and foremost, with this the only goal cited by more than half of respondents. In this respect at least, CTV mimics linear TV, traditionally a branding vehicle.
Not too far behind, though, are performance goals: improved ad relevance (40%); and precise audience targeting (39%), which is thought of as a leading benefit of using CTV advertising.
In fact, branding and performance teams (whether in-house or external) are almost equally as likely to be primarily responsible for CTV marketing, with hybrid in-house brand/performance (27% share) the most common option. Notably, the share who say that in-house performance teams are primarily responsible for CTV marketing has grown from 13% last year to 24% this year.
Other Survey Highlights:
- Some 37% of respondents say that engaging creative formats are a primary goal for CTV advertising. More than 4 in 10 (42%) are leveraging ad creative that allows viewer interaction, while 27% say that ad selectors that allow viewer choice are part of their strategy. Ad selection has been shown to be of particular appeal to CTV viewers.
- Almost two-thirds (65%) of respondents say that their CTV campaigns leverage retail media networks (RMNs) to a “very significant” (29%) or “moderately significant” (36%) extent this year, though fewer (54%) feel that they will leverage RMNs to the same extent next year.
- First-party data (51%) is more widely used than third-party data (43%) to reach target audiences with CTV advertising this year, with geolocation close behind (39%).
- Brand awareness (54%) is considered the most valuable metric when measuring CTV advertising, followed by website conversions/revenue (48%).
- Fewer respondents believe that they will be measuring CTV campaigns next year at high accuracy than say they are this year, with more instead feeling that the accuracy of their campaign measurements will be “medium”.
- The top 2 challenges encountered in CTV advertising campaigns are brand safety and reaching relevant audiences, each cited by 4 in 10 respondents.
For more, download the full study here.
