Home Opinions YouTube and CTV – the relationship all advertisers should love

YouTube and CTV – the relationship all advertisers should love

This article argues that many advertisers are yet to “get ahead of the curve” and redistribute advertising budget to reflect a decline in broadcast linear TV viewing, and that spending more on other channels, and notably YouTube, will yield a greater return on investment. It lists the attributes of YouTube, including its continued growth in popularity among 16-34s, content diversity and accuracy of targeting, and explains why connected TV plus YouTube is the perfect advertising partnership.

Rob Blake, UK MD, Channel Factory
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By Rob Blake, UK MD at Channel Factory & Martin O’Boyle, Strategic Advisor for Channel Factory. 

Linear TV is no longer the standalone video content provider. Streaming services are taking big chunks of viewing time away from broadcast television, and YouTube, with its billions of hours of content, is no different. With the rise of CTV predicted to continue, this trend is undoubtedly going to grow – by 2023, it is expected that over 75% of Western European households will be using CTVs.

With this immense growth in Smart TV ownership, and the rising popularity of consuming YouTube content, it’s about time advertisers asked themselves; could YouTube become their greatest asset?

The decline and inflexibility of broadcast TV

 Linear TV has been in decline since 2013. This has been drastically apparent for the younger generation (aged between 16-34) which has seen a loss of around 60% of viewing from 2013 to 2021. Yet somehow, according to a Comcast report, advertisers should still be looking to use a minimum of 70% of their budget on broadcast television?

Despite an obvious downward trend in consumption of broadcast TV, many advertisers are yet to get ahead of the curve and are still spending big bucks on traditional TV advertising that could be redistributed among other channels to yield a greater return on investment.

Broadcast television has far less choice when it comes to content than YouTube. Whilst there may be multiple channels, each with plenty of shows, this is still dwarfed by the overwhelming amount and diversity of content on YouTube.

This equates to far less flexibility and accuracy in terms of audience targeting for advertisers. Ultimately broadcast TV has a wider audience range in one place, so whilst advertisers might be reaching big numbers, they have very little way of knowing if they are reaching the right audience. Which in turn will lead to lower engagement, and a lower return on investment.

Whereas services such as YouTube have a range of channels and content, all of which come with a niche and focused audience. This allows advertisers to be much more accurate with their targeting and makes their budget stretch much further.

Martin O’Boyle, Strategic Advisor, Channel Factory

The rise of CTV

CTV provides advertisers with a plethora of opportunities. With 68% of individuals in the UK having access to Smart TVs in their households it must be apparent to advertisers that maximising their CTV advertising will allow them to reach a wide audience.

The number of CTV apps available on the Roku Channel Store, Apple TV OS App Store, and Amazon Fire TV increased by over 38% year-over-year in 2020. This provides advertisers with a wide array of content and services to choose from, allowing them to pick those that align most with the objectives of a single advertising campaign – advertisers no longer need to settle for hitting unnecessary audiences just to reach one demographic on broadcast TV. The opportunity to diversify, and target a specific audience, combined with the increase in popularity of Smart TVs demonstrates why CTV must be seen as a potential primary advertising outlet.

YouTube & CTV – the dream team

When you combine CTV and YouTube, you create the perfect advertising partnership. YouTube’s popularity is continuing to rise, the platform represents 26% of daily video consumption for young people aged 16-34 compared to only 20% for commercial broadcast TV. However, YouTube isn’t just for the young. According to Ofcom in Q1 2021, the total number of YouTube videos viewed by UK online adults was 22% higher than in Q1 2020.

Alongside the reach that makes this combo successful is the flexibility and targeting YouTube provides advertisers. Brands can easily, and successfully diversify their audiences or target a specific group on YouTube due to the vast number of content creators on the platform. Inclusion lists can be created so that brands can reach diverse audiences with their content, and support a diverse range of creators. In a time where social responsibility is key to many brands, using YouTube advertising and inclusion lists means advertisers can add deeds to their words. Significantly, YouTube Ads on CTV drive a 10% greater lift in recall than ads on Linear TV [9] –proof that this combination works!

YouTube and CTV are evidently the advertiser’s dream team. Their increasing popularity and the opportunities they provide in terms of audience engagement and targeting make them a must-have for all brands. To drive home key brand messages, support audiences and of course maximise ROI, advertisers need to be rethinking their budgets and putting great emphasis on CTV.

Other references:

1/ Google/Media Science Lab study, 12 ads, 432 participants. Platforms included: YT OTT, Linear TV. US, November 2018. Google/Media Science Lab study, 12 ads, 432 participants. Platforms included: YT mobile, YT desktop, YT OTT, Linear TV. US, November 2018.

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