Key Trends Impacting the OTT/CTV Advertising Landscape

Authored by Amitt Sharma, Founder and CEO, VDO.AI

Over the last few years, there has been a paradigm shift in content consumption via Connected TV (CTV) and Over The Top (OTT) platforms. Consumers no longer need to subscribe to multiple cable TV channels to watch content, manage their schedules according to their favorite shows, or worry about the weather impacting the availability of cable TV. OTTs and CTVs are more convenient, accessible and easy to stream modes of entertainment, with an amplified outreach.

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Needless to say, with the change in customer preferences and an increased affinity towards video consumption, CTV/OTT advertising is bound to expand its market share over the next few years. CTV will offer a chance to target more audiences and grab the attention of the massive audience present on CTV, thereby leading to an explosive growth in CTV and OTT advertising spend and laying the foundation stone for the next phase of the digital advertising landscape worldwide.

In 2021, the CTV market witnessed 4.7% of total ad spend, roughly amounting to $13.1 billion. With the global advertising market pegged at $ 700 Bn in 2022, the sector is expected to be impacted by some key emerging trends in the coming years.

1. Emergence of Cookieless Solutions

The internet is a hub of cookies, which help marketers gauge and understand consumer behavior and help create a personalized experience for those using the internet. However, privacy and data security concerns are prompting brands to refrain from using third-party data and switch to cookieless advertising instead. In their endeavors to win consumers’ confidence, there is a marked transition towards cookieless identity solutions in the AdTech landscape. This has prompted publishers to rely on first-party data, collected through activities, interests, and behaviors. Since this data is obtained with consent, it evades privacy violations and provides deeper insights into consumer preferences. Leveraging this data, advertisers can display laser-targeted ads that increase the probability of engagement, leading to conversions. CTV advertising would become even more significant in the cookieless world because it is always operated in a cookieless environment and helps marketers target with precision.

2. Contextual Targeting

Contextual targeting is the process of matching ads to placements in relevant content. With contextual targeting, ads are viewed as interesting rather than annoying or intrusive. Advanced analytics ensure the highest effectiveness for the advertisements’ call-to-action. With accurate geographical location, demographic mapping, and behavioral targeting, these ads have simplified the segmenting process and eliminated cold targeting. Sophisticated data-led insights provide better context for a clearly defined target audience, all in real-time. Features such as real-time bidding lead to accurate targeting enabled by Artificial Intelligence and Machine Learning that create compelling multisensory commercials. Contextual advertising not only fills the gap for online advertising but is also able to expand into the CTV and OTT spaces for data-driven, effective marketing results for video, audio, and text. This would enable advertisers to align their advertising campaigns with the brand's target audience data to produce significant results.

Dependence on key engagement metrics

The success or failure of a campaign is ascertained through metrics beyond just ROI. Website traffic, Click Through Rates, CPM, Minimized Bounce Rates, Cost Per View, Impression goals, Delivery Speed, Frequency Mapping, Viewership Rate, Cost Per Conversions, and Conversions, among others, are some of the preferred metrics used by brands. As the landscape becomes more competitive, metrics are going to be the defining factor for CTV and OTT advertisements for both publishers and advertisers. The lucrative ad monetization solutions are targeted towards achieving these metrics.

3. Data-driven creatives

Till a few years ago, data was applied only to mobile and digital mediums. Now it’s a significant part of television too. Through data- driven TV, advertisers are able to communicate their message to the right audience at the relevant time. With the growing viewership of streaming platforms, brands are focusing heavily on data driven advertising. What this essentially means is that data driven advertising is the way forward for optimizing brand communications based on customer information. Impactful data-driven advertisements are not just trying to sell a product or service. Instead, they demonstrate the brand's authenticity, reliability, and value addition to the customer. This ensures the creation of more effective and immersive advertisements with a higher impact. Effective narrative techniques on the back of data and insights will be the driving force for CTV and OTT advertisements in the near future.

4. AI as a Trailblazer for CTV / OTT Advertising

AI already plays an integral role in advertising technology and has transformed how advertisements are envisaged by both brands and audiences. As technology becomes more robust and advanced, CTV advertisements will generate more optimized solutions. Furthermore, since the content is viewed on multiple devices, the advertisements become more hyper-personalized with enhanced targeting options. AI provides more impactful deliveries, thereby minimizing the associated commerce. With an increase in the efficiency and effectiveness brought about by AI, the benefits and appeal of CTV advertisements are on the rise.

With the continuous growth in streaming apps and smart TVs, CTV advertising is here to stay with higher year-over-year growth. CTV/OTT publishers can get access to a unified auction that generates high-impact monetization benefits for them. This provides them with a high CPM for every impression sold. CTV broadcasters can leverage advanced bidding technology for multiple demand channels, simultaneously. In an era where people switch seamlessly between web and mobile, these advertisements will ensure increased revenues. In addition, the publisher can acquire control to generate the required metrics, as well as create a sophisticated reader path that completely automates the engagement and monetization journey. Features such as zero ad breakage and consistency across all the platforms deliver a seamless experience for the end-users and generate high-quality and contextual advertisements.

As subscription-based streaming services increase, CTV and OTT advertising are poised to drive high engagement rates. More and more players are expected to capitalize on the monetization opportunities to create unforgettable and immersive advertisement experiences for the end consumers and unprecedented growth for the advertisers and the publishers.