Connected TV (CTV) popularity will continue to grow as we enter 2023. In 2022, 46% of adults in US households watched video on a connected TV daily. It is expected that by 2024, half of all internet users will use free streaming services. 

Here, we take a look at how marketers can incorporate CTV advertising into their marketing strategy in order to retain users and what the future holds for this method of advertising. 

CTV Advertising and App Marketing Strategies

CTV has turned video consumption and the entire digital advertising landscape on its head. As viewers switch from linear TV to streaming alternatives, advertisers must be quick to embrace the potential of this cord cutting trend. Identifying major target audiences, choosing optimal measurement partners and investing in CTV advertising budgets are three tools for app marketers to jumpstart their CTV strategies.  

Who’s the Target Audience?

In 2022, a whopping 92% of US households were reachable by CTV programmatic advertising, while the number of CTV users grew to more than 110 million among Gen Z and Millennials. 

CTV Generation Trends

Source: Statista - Number of connected TV users in the United States from 2020 to 2025, by generation

Although CTV is growing rapidly among all generations, it’s important to take into account the top viewing demographics. Because Gen Z and Millennials are the most engaged demographic when it comes to CTV viewing, marketers should pivot their strategies to capture these audiences. 

For example, 61% of Gen Z and Millennial users prefer short videos under 1 minute long. This means that marketers should place their strongest messages at the beginning of their video advertisements. It’s likely that these viewers will tune out after 30 seconds of the ad, so making sure the call to action is displayed early in the video is a fundamental component of winning these young users. 

Choose Partners Wisely 

When considering how to include CTV in your brand’s app marketing strategy, choose the right app marketing partner. These partners should be able to set up realistic goals and measurement benchmarks that will aid you in the creative process. Because CTV might be a newer channel for marketers, creating different measurement techniques in order to track progress will help the teams learn from the advertising campaign. 

With all emerging channels, it’s important to test and iterate on campaigns in order to see what works best. Finding a partner that is willing to innovate and learn from campaigns is important when choosing who to work with. There is an abundance of opportunity when it comes to CTV advertising and partnering with companies who are ready to try new strategies will bring app marketers success. 

Invest the Advertising Budget

Connected TV advertising spend is expected to rise from $17.44 billion in 2022 to $27.47 billion by 2025, a 57.51% increase. Globally, CTV advertising holds 17% of total media marketing ad spend. This means app marketers who wish to grow their viewers in 2023 should invest heavily in their CTV advertising budget this year. 

The more marketing dollars that are put into CTV advertising campaigns, the more successful the campaigns will be. Making sure that the content shown to target audiences is high quality and personalized is extremely important to optimizing for conversions. In fact, 43% of app markets say that investing more in ad budgets has driven higher ad conversions. Marketers who invest more in their CTV advertising also have found that they have advanced audience targeting opportunities and 45% say that CTV advertising improves ad spend efficiency.

With 78% of US marketers planning to invest more in CTV in 2023, the one’s not investing will stand out to consumers. 

Future Trends of CTV Advertising

Ignoring CTV advertising opportunities in 2023 will be akin to rejecting social media when it rose in popularity in the 2000’s. CTV is not only here to stay, but rapidly replacing linear television. With rising measurability and younger generations choosing streaming services over cable, app marketers can’t ignore the trends in this growing space. 

Consolidation of Streaming Platforms

Currently there are more than 200 global streaming services. In 2022, 85% of US households had at least one subscription to a video streaming service and 7% of Americans had six or more streaming subscriptions. However, 64% of consumers desire some sort of streaming service bundle that allows them to choose which streaming services they want. 

Consolidation of streaming platforms is already happening, for example Disney+, Hulu+ and ESPN+ joined forces to create a bundle offering for viewers who want to pay less to have all three. These platforms are replicating a “walled garden” approach. This means that they are pulling owned content within their walls and in some cases, producing their own content specifically for their platform. 

We can expect streaming platforms to continue consolidating as the popularity for CTV grows. App marketers working with these bundled platforms should test and see where the overlap for demographics lies within these bundles. Creating ads that will appeal to all audiences within a platform will save time and money.

Shift in Consumer Viewing Behavior 

For traditional television programming, prime time viewership is typically an evening lineup between 6pm and 10pm. This means that CPMs are more expensive during these prime time viewing hours. However, the timing of ad placement on CTV channels may be changing. By 2023, the volume of ad impressions on TV and streaming media channels that occur between 9am, and 5pm is expected to grow by 60%. With more ad inventory supply available, CPM prices should stabilize.

Furthermore, advertisers can expect that with the rise of work from home combined with the ease of CTV viewing, users will be active on these devices at all hours of the day versus just the evenings. 

 

“CTV is going to have its moment this year. It has been the fastest growing digital channel with double digit increases in adoption just in the last two years. The convergence of TV and programmatic ad buying allows for the ability to filter down the traditional massive audience reach of thousands of stations and markets – we can now segment these audiences.” - Nancy Roberts, CMO at YouAppi

Takeaways of CTV Advertising 101 - Part 2

Connected TV (CTV) popularity will continue to grow as we enter 2023. Here, we take a look at how marketers can incorporate CTV advertising into their marketing strategy in order to retain users and what the future holds for this method of advertising.  

  • Who’s the Target Audience: In 2022, the number of CTV users amounted to more than 110 million among Gen Z and Millennials. Because Gen Z and Millennials are the most engaged demographics when it comes to CTV viewing, marketers need to focus their strategies on capturing these audiences. 
  • Choose Partners Wisely: When considering how to include CTV in your brand’s app marketing strategy, it is essential to choose the right partner. There is an abundance of opportunity when it comes to CTV advertising and partnering with companies who are ready to try new strategies will bring app marketers success.
  • Invest the Advertising Budget: Connected TV advertising spend is expected to rise from $17.44 billion in 2022 to $27.47 billion by 2025, a 57.51% increase. The more marketing dollars that are put into CTV advertising campaigns, the higher the success rate of the campaigns will be.