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Connected TV to the Factor of X

ITV’s powerhouse results earlier this year and its determination to build on its streaming success with ITVX illustrate the opportunity for advertisers working with connected TV. With the Pluto TV FAST service running big outdoor campaigns across London and Disney looking towards AVOD, plus a cost-of-living crisis, CTV advertising has fast growth potential. Real-time data and precise targeting, and ways to link ad exposure to brand engagement, plus the opportunity for brands to harness their own CRM data for campaigns, means more budget will flow to connected TV.

Matt Keating, UK Sales Director, VDX.tv
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There is a famous quote from management guru Peter Drucker. “What gets measured, gets managed.”  

In advertising, we have long known this to be true. The media environments best able to produce metrics and establish effectiveness invariably attract those in charge of managing spend.

Just look at the rise of digital over the last two decades. The decline of traditional media, such as print and TV, directly correlates with the rise of digital channels, and the growing ubiquity of smartphones. Marketers, faced with tightening budgets, want to be able to clearly demonstrate ROI.

But how we measure things in digital is changing. As privacy rises up the agenda, and tech giants respond to new consumer concerns, the world is moving away from behavioural targeting through third-party cookies.

Within this change lies opportunity for advertisers – as ITV’s results earlier this year illustrate.

CTV to the Factor of X

In March, ITV posted its largest advertising revenue growth in its history. The broadcaster saw advertising revenues rise by 24% YoY to reach almost £2bn – with its AVOD revenue up by a significant 41%.

“Our ’More Than TV’ strategy, sets ITV up for digital acceleration,” said Chief Executive Officer Carolyn McCall. “Our strong balance sheet and cash flows enable us to invest behind our strategy to build a more valuable digital media and entertainment company and deliver returns to shareholders.”

Or in other words, building on its success in CTV thus far, ITV is pressing its advantage and launching ITVX later this year, a new streaming service that will premiere new content before traditional linear broadcast. And they aren’t the only ones keeping busy.

There is a lot of movement in the UK’s CTV space: platforms like Pluto TV are running big outdoor campaigns around London – and brands like Disney are considering a move into AVOD.

The wider socio-economic context adds credence to these moves. As inflation bites and the cost of living rises, the pressure on household finances is growing. This could see consumers opt to reduce their active subscriptions and move from SVOD to AVOD in order to save money.

Understanding households

The UK is still behind countries like the U.S. when it comes to CTV and CTV advertising; however with companies like ITV creating more opportunities for streaming content and advertising on its platforms, CTV has the potential to be fast-growing across UK households.

Modern audiences exhibit both the habits and the devices required for effective CTV advertising. Over 78% of European audiences regularly watch CTV – and 42% of households now have two or more Smart TVs. In the UK, 89% of consumers use a streaming service at least once a week and 74% use AVOD at least once a week.

These figures are naturally attracting advertisers. CTV benefits from being driven by real-time data, providing an opportunity for precise targeting at the local, household or even device level.

Brands aren’t going back to appealing to undefined audiences en-masse. Login and authentication steps empower advertisers to target individual viewers, while digital attribution helps identify the link between ad exposure and engagement.

And this data melds with other first-party data sources. Marketers can use their own customer relationship management (CRM) and transaction records, online data such as website visits and available digital segments indicating, for example, kids at home or occupation type, to identify when and where to reach their desired audience.

The media landscape is changing. But people aren’t. As Drucker noted long ago, the stuff that gets measured, gets managed. As CTV offers consumers increasingly appealing AVOD options, and offers brands the detailed metrics they crave through household targeting, more interest and investment will naturally flow through the channel.

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