CTV is set for a larger share of video ad spend in the US, with overall spending on the medium forecast to double between 2021 and 2025. CTV and OTT ads offer several audience-related benefits, according to a study [download page] from Premion in partnership with Advertiser Perceptions.
For the 151 ad agency or brand-side marketers involved in decision-making for CTV/OTT advertising surveyed as part of the report, there are 3 main audience-related benefits of CTV/OTT advertising: precision audience targeting (as cited by 40%); extended reach for linear TV campaigns (39%); and capturing declining TV audiences (38%).
The first two of these advantages were also the top two responses given when respondents were asked their audience-related reasons for increasing spend on CTV/OTT this year. Considering the prominence of linear TV in the results, it’s no surprise that respondents said that budgets to fund increases in spend are most commonly coming from linear TV, a finding also shared by previous research from MNTN and Digiday. In an interesting plot twist, new Advertiser Perceptions data reported by Insider Intelligence indicates that 1 in 5 marketers have cut spend in response to inflation, with more suspending connected TV than linear TV campaigns.
Nevertheless, two-thirds (68%) of respondents either completely (35%) or somewhat (33%) agree that connected TV/OTT allows them to target in ways they cannot with linear TV. With targeting emerging as such a key feature, 82% of respondents said that audience reach, scale and targeting are either very (50%) or somewhat (32%) important when choosing CTV/OTT providers.
CTV/OTT Advertising Challenges
Virtually all respondents admit that there are challenges to connected TV/OTT advertising. The most commonly cited of those is transparency over where ads are running (42%), with marketers much more likely to cite this than agencies (49% and 36%, respectively).
Close behind, 4 in 10 point to difficulties managing ad frequency across publishers/platforms, and 38% to cost. Interestingly, ad fraud (29%) and brand safety concerns (28%) sit at the bottom of the list.
Advertisers should be wary of over-counting, according to recent research from GroupM and iSpot.tv. The analysis revealed that “on average, 8-10% of streaming impressions play when the TV is shut off, primarily through ancillary devices,” with that figure rising to 17% when limited to CTV streaming devices such as dongles, gaming consoles, and sticks.
Meanwhile, although brand safety concerns are low on the list of challenges, roughly 9 in 10 respondents separately said that brand safety will either be a top priority (29%) or a priority (62%) for them in their CTV/OTT advertising planning and strategy. Moreover, 85% are very (24%) or somewhat (61%) concerned with ad fraud in this form of advertising.
For more, download the study here.
