Connected TV is attracting budget from linear broadcast advertisers looking to find audiences as they watch more streaming TV, but this is certainly not the only source of growth for CTV ad revenues. A panel of experts at The Future of TV Advertising Global in December made it clear that connected TV is attracting advertisers who were not previously on TV and that some budget is being moved from social and even search as the performance capabilities of television become more visible.
Georgia Izon, Head of Digital Ops & Innovation at the media agency JAA Media, which specializes in helping challenger brands compete in AV marketing against better funded rivals, said most client budget that has been moved into connected TV came from linear [broadcast], although some was from digital and some is from test budgets. JAA Media appreciates the tighter targeting (and reduced waste) that CTV provides compared to linear, which is helping clients in their efforts to punch above their weight.
Chris Hock, VP, Monetization at Whale TV, the independent TV OS provider that is found on multiple brands of Smart TV, agreed that, based on what he sees across the Whale TV platform, brands already seen on linear broadcast are now running campaigns on CTV, “but there are some new campaigns you might not see on linear including from challenger brands who are looking for an efficiency play. There are also campaigns that maybe skew younger or promote niche products.”
Hock expects connected TV targeting capabilities to attract more advertising budget. He also observed that broadcasters deal with advertisers numbered in the hundreds while Google works with advertisers in the millions – and he believes CTV provides an opportunity to grow that customer base for television [by attracting smaller brands].
James Wilhite, VP of Product at Publica (which provides an advertising platform for connected TV and other OTT featuring everything from unified auctions and campaign management to ad podding) reckons lots of new budget for connected TV comes from brands that are not seen in broadcast linear TV, including high quality small and local businesses who traditionally have advertised in other places [e.g. ‘digital’]. “We are seeing that budget shift because of the addressability that is inherent to CTV,” he told the London audience.
Pippa Scaife, Vice President of Global Partnerships at NBCUniversal, the broadcast and streaming giant behind brands like NBC, Hayu, Bravo and Peacock, confirmed that much of the budget for connected TV is coming from heritage linear advertisers but she also wanted to counter the perception that budget only shifts in order to reach the same audience after it migrates to streaming. Advertisers do not consider linear broadcast and connected TV as mutually exclusive, but complementary, she declared.
“When we air shows on Bravo – our premium reality channel – and then on Peacock the next day, only 7% of the audience watches both versions. So, if you want to be in that space [targeting reality fans] you must be in both.”
Investment is also moving into CTV from digital, she added. “As CTV becomes more sophisticated and targeting becomes more precise, we are starting to see CTV used more as a performance driver, so we are starting to see budget come over from social and even some from search.”
This panel included a discussion about how advertisers want to use connected TV, with Scaife pointing out that CTV is a brand building tool like linear broadcast. “But as we introduce more data partners and more sophisticated measurement, that is shifting.”
She noted how Peacock in the U.S. is working with Walmart for retail data that boosts the understanding of intent and helps with better decision making, while also providing closed loop attribution. Meanwhile the use of QR codes or ‘text to shop’ in TV advertising strengthens connected TV versus other digital platforms, she suggested.
“We are seeing partners who want full-funnel campaigns [from connected TV], though maybe not right to the bottom of the funnel [from the TV portion]. We are seeing more in the direction of performance and real-time measurement, and hopefully that will mean more money,” Scaife said.
James Grant, SVP & Head of Advanced TV at Equativ, which provides an ad-tech suite spanning curation, SSP, DSP and Adserver solutions (among other things) also confirmed the movement of budget from linear into connected TV and reiterated the potential for CTV to attract budget from digital, partly because of the increased ability for this channel to meet performance objectives. His company is starting to see even display advertisers using online video streaming and connected TV for this reason. “There is different money arriving,” he announced.
Guided by moderator Jamie West (the well-known strategic advisor and consultant), the panelists offered views on what was going to drive connected TV viewing and advertising growth. Wilhite at Publica believes ‘comfort TV’ is one important source of viewing – those popular catalogue shows that for years have graced repeat channels and cable TV and which you can watch all day – like ‘Friends’.
Sport was flagged as a driver for connected TV growth, and NBCU’s Scaife revealed that there were 13,000 hours of sport on Peacock (the ad-supported subscription streaming service from NBCUniversal) in 2024. There is less sport in CTV than you find on broadcast linear, but she reckons the Paris Olympics demonstrated the potential to touch new audiences, partly by allowing people to ignore the sports they don’t care about and find the ones they love. “There is a much larger supply of content, which means inventory for advertisers.”
It is well documented that large concurrent audiences in live sport are a challenge for programmatic, given the need to send out millions of ad requests and process those millions of ad decisions and return the selected ads to breaks that will be watched at the same time. Grant at Equativ believes the technology ecosystem can now handle anything that is needed for live sports streaming, partly thanks to the use of pre-fetching solutions that start the programmatic trading and execution process a short time ahead of the ad breaks, so there is longer to complete the workflow.
However, the real question is whether we can handle mass concurrent volumes economically, and there the answer is probably ‘no’, he believes. Referring to how CDN server capacity (for ad streams as well as content streams) can be planned in advance using forecasting, he said: “Theoretically we can manage the concurrency but you need a plan in place to ensure the reliability and latency levels and redundancy needed, and today that would look inefficient to a Chief Financial Officer.”
Live sports events can be unexpectedly popular, and audiences ebb and flow during the event itself – and on-field events could cause audience spikes. Yet CFOs will not want over-provisioning of delivery infrastructure to provide a large safety buffer (because it is a waste of money). “So, we have to keep working on the models for forecasting concurrent viewing,” says Grant. “From an economics point of view, the industry is still learning.”
Scaife sees premium sports streaming as a new place to advertise. “We are opening up new environments to brands, like live sports, which is at the forefront of the streaming conversation right now,” said the NBCUniversal executive. “Live sport has been cost prohibitive for lots of brands but as we move from one-to-many [broadcast distribution] to one-to-one [via unicast streaming] there is a chance for newer and digitally native [brand] entrants to move into that space.”
She revealed that during the Paris Olympics, which were enabled programmatically across NBCU, 90% of the brands buying programmatically were new advertisers to the games. “We had more advertisers in that Olympics than at Rio and Tokyo combined and $500 million of revenue from brands who had never advertised in the Olympics before.”
The discussion touched briefly upon definitions of ‘CTV’ as an advertising channel and Izon at JAA Media shared her company’s definition as inventory found on a television device that is not linear broadcast or BVOD. But this non-broadcaster portion of the streaming TV market still represents a mass of inventory “that could be anything from [Amazon’s streaming service] Prime Video to low-end FAST.”
Not surprisingly, clients want to know what they are buying so JAA Media produces line-by-line plans for this channel and gives clients as much information as possible. Izon believes this diverse CTV inventory pot and the transparency within represent one of the key challenges when looking to increase budget for the channel. Other potential barriers to spending more are pricing (with some connected TV partners still extremely expensive, she said).
Grant highlighted measurement as the No.1 challenge when moving budget to CTV – and so a potential barrier to greater investment in this space. “If you can’t measure it, why would an advertiser buy it?” he asked. He contrasts the strong and robust measurement in linear broadcast to the streaming environment with its fragmented audiences and data pools, and the difficulties of trying to correlate the two.
Speaking after the panel, he made it clear he is particularly interested in the need to combine the performance metrics associated with outcomes and the measurement needs associated with brand building – and the opportunity to use outcomes as a guide to success, helped by attribution tools. He gave retail data, including point of sale and footfall, and website activity data (after exposure to ads), as examples of attribution that support the case for CTV as a performance channel.
One of the main themes to emerge from The Future of TV Advertising Global 2024, articulated on day one by James Rooke, President at Comcast Advertising, was the need for television to simplify ad buying and execution in order to compete more effectively against global digital platforms. Scaife picked up this topic, also referring to the lack of consensus on CTV definitions. “The majority of advertisers on social platforms don’t worry about definitions of the platform. What they care about is how easy it is to execute and how quickly they can turn stuff [campaigns, measurement etc.] around.”
“TV is really hard. The business we have built around TV is time consuming and resource heavy.” She noted how easy it is to spend serious budget with Meta via its self-serve platform while at home, on a Friday evening, while CTV requires line-by-line details of a media plan from your agency.
“We talk about wanting to bring in revenues from that space [social/search/digital] but we have not set up the ecosystem to do that at scale, although there are businesses that have introduced some of the measures needed, like NBCU with the Peacock Ad Manager that enables a certain amount of self-service.”
Speaking after the panel, Grant at Equativ agreed on the need to simplify television and provided a practical example he would like to see, and which would encourage more investment in connected TV: industry collaboration on contextual signals in programmatic so buyers can better understand what they are buying.
