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connected TV

The revolution is being televised – The rise in CTV as a marketing channel

by Nadem Ezzat | 07.10.2021

There’s a misconception that TV is dying. This misconception is fueled by the fact that cable has been hemorrhaging subscribers, broadcast program viewership numbers are down across the board, and these trends have been persisting year over year. Although cable is on the decline, this doesn’t necessarily spell the end of television. With the decline of cable, Connected TV (CTV) has continued to grow.

What is Connected TV?

Connected TVs are TVs that are connected to the internet – it’s self-explanatory. However, when discussing CTV, it’s important to understand that it is different from OTT. Connected TVs are television units that can connect to the internet without any external device requirements. For example, all smart TVs are connected TVs. Over-the-top units are accessories that can be plugged into TVs to give them internet capabilities. For example, the Amazon Fire Stick is an over-the-top unit. Although both CTV and OTT enable internet connection, the advertising capabilities of both differ.

What is fueling the change towards CTV?

This shift from cable to internet is occurring for several reasons with the most prevalent being that content consumption has changed. Consumers prefer video on demand (VOD). VOD is just more convenient than scheduled programming: VOD is accessible through multiple devices, consumers like that they can watch what they want when they want, and VOD exclusive content has been very compelling. There are three types of VOD:

Linear TV is restrictive in ways VOD isn’t: linear doesn’t offer the same accessibility benefits, it restricts viewing freedom, and it might not have the greatest or most relevant content in our current climate. VOD offers more catered viewing opportunities for viewers to watch on their own terms and is also more affordable for the consumer. Linear TV packages can be pretty expensive with a library of channels that might not be very relevant to consumers. On the other hand, consumers can consume VOD content to suit their interests. For example, they can get a Netflix subscription to watch shows and a DAZN subscription to stream their sports.

What does this have to do with CTV?

This trend feeds into the rise of CTV. Consumers want to use their TVs to accommodate their viewing habits. It is no surprise that 63% of time spent on television is on streaming services. Thus, their TVs require internet connectivity to accommodate their content consumption needs.

As Connected TV’s growth is predicated on the growth of Video On Demand, successes of VOD increase demand for CTV. In fact, SVOD subscriptions have already surpassed paid TV. Furthermore, TVs are increasingly being used to view VOD content: for example, 250 million hours of YouTube are watched daily on TVs globally. This trend persists in Canada as well: 13 million Canadians streamed YouTube on their TVs in December 2020.

What do these YouTube numbers show? For one, the watch times are ridiculous. It’s also impressive that around 1/3 of the Canadians have adopted just one of the many VOD services on their smart TVs. The audience is massive and they spend a lot of time on the channel. This is perfect for advertisers.

CTV and VOD should command the attention of marketers. The audience alone should be enough to generate interest: CTV is showing strong growth and there is no predictor of decline in sight. And most importantly of all, this is without even considering the targeting capabilities of CTV. In turn, this means Connected TV is a very promising marketing channel.