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Why brands are increasingly investing in CTV

Why brands are increasingly investing in CTV

Marketers are increasingly tuning into data-driven channels such as connected TV, as the industry watches several years of innovation and disruption unfold over just a few short months. Viewership in the space is exploding, industry leaders from The Trade Desk, Cadillac and Discovery Communications said during a recent panel on the future of television at Ad Age Next.

An unexpected global pandemic, economic shutdown and a shift away from the TV upfront ad buying model have accelerated linear TV’s decline. Powerhouse brand Procter & Gamble, for instance, turned the upfronts upside down earlier this year when Marc Pritchard, its chief brand officer, declared that the world’s largest ad spender would no longer partake in the annual event.

Economic uncertainty is also playing its part, as marketers grapple with increased pressure to be both agile with their ad spend and tie it back to business outcomes. Stay-at-home mandates, meanwhile, have prompted consumers to opt for streaming services at an unprecedented rate.

Taken together, these catalysts explain why eMarketer expects the number of U.S. cable TV subscribers to dip below 80 million in 2020, a 7.5% decline year-over-year. It’s also why channels such as CTV are growing so rapidly for The Trade Desk, Tim Sims, chief revenue officer at The Trade Desk, said during the Ad Age panel.

“This has been a confluence of three macro events across the consumer, the media companies and the advertisers that has led to the growth that we've seen this year,” Sims said. “In some cases that acceleration has been about three times what the average has been in years past.”

Unlike linear television, CTV allows marketers to bolster their first-party audience data by coupling it with viewer data from media companies such as Discovery Communications. Connected TV’s surge in popularity also allows advertisers to reach a subset population—cord- cutters—whom they can’t reach on linear, Sims said.

“When we marry those together, it results in a much more customized experience for the consumer,” he said. “But it really boils down to the advertiser finally being able to take their data and point it at the television screen.”

How Cadillac is measuring its CTV success

Marcie Perez, associate director of integrated marketing and digital innovation at Cadillac, said she “couldn’t agree more” with Sims’ remarks.

“Being able to give our high propensity audiences over to our partners and say, ‘These are the people that we need to target’ and then provide them with specific creative that's relevant to those audiences—it couldn't be more important,” Perez said.

Perez emphasized the importance of getting back-end data to tie back to sales—an area that’s historically proven difficult to achieve in linear TV. “Seeing how that attribution is playing to our overall marketing is critical,” she said.

Connected TV has other advantages, according to Perez, who added that the emerging channel is allowing the brand to be “very flexible and nimble in these uncertain times.”

"COVID has hit different marketers harder than others,” she said, but having access to CTV has allowed Cadillac to zero in and reach all of its consumers.

Viewership ‘explodes’

The shifts have also created more CTV inventory in the programmatic arena. Media companies such as Discovery Communications, for example, are embracing connected TV by equipping advertising with the ability to not only target consumers but also measure the efficacy of their ad spend, said Jill Steinhauser, senior VP of ad sales planning and operations at Discovery Communications.

“We’ve really seen viewership explode,” Steinhauser said during the panel. “CTV has really matured very, very quickly in terms of the data that you can glean.”

The media company is widely regarded as a CTV pioneer after making large strides with its TV service five years ago. Discovery Go allows viewers to watch episodes of their favorite shows on popular networks such as HGTV, Food Network and TLC through devices ranging from AppleTV and Roku to Xbox. And recently, the company announced the Jan. 4 launch of its new streaming service Discovery+.

“We want to make sure that the fans of Discovery’s content can find it, whether it’s on a traditional linear screen, on your connected device, on your mobile device,” Steinhauser said. “CTV has very much been a large audience for us. All our networks are carried on a device, multiple devices, and we feel very bullish about its future.”