GUEST ARTICLE: Innovations in advertising will be fueled by the growth of CTV audience in 2023

81 per cent of the exposed viewers claimed to have been influenced by the CTV ads.

Mumbai: Connected TVs (CTV) are increasingly becoming a viable alternative to linear TV. India’s CTV growth has increased on the count of a growth in smart TVs that are set to overshadow the percentage of shipments when compared with linear TVs. According to a counterpoint research, smart TV's contribution to overall TV shipments reached its highest-ever share of 93 per cent during Q3, 2022. Smart TVs are now affordable, offer excellent picture quality, are supported by a thriving app ecosystem, and offer a range of quality streaming content for English- and non-English-speaking viewers.

As a result, viewing habits have shifted, and there is a greater appetite for streaming content. A mediasmart India CTV 2.0 report released earlier this year showed that 83 per cent of the survey respondents use their smart TVs to watch content using the internet. The steadily increasing connected TV audience presents a very strong proposition for advertising as it has penetrated non-metros and is the new way to watch TV for these audiences, who use CTVs for viewing OTT & news, gaming, music, and more.

The co-viewing growth holds significant potential for advertisers who can leverage newer technologies to drive audience engagement and brand impact.

2023 - The dawn of a new era for CTV growth in India

Today, the CTV phenomenon has heralded a new era as families have emerged from their mobiles and tablets and re-entered the living rooms to enjoy watching content together on the big screen. With plenty of options and genres to choose from, CTV has something for everyone. Now, with more brands including CTV in their media mix, audiences are cutting the cord in favour of CTV. Changes to the CTV ecosystem—both in India and around the world—are set to make it a big bang firecracker for this holiday season and the New Year.

This makes CTV ads also to be impactful, with 81 per cent of the exposed viewers claiming to have been influenced by the CTV ads, as found in the mediasmart research. With CTV’s potential to improve purchase intent, 2023 is set to be the dawn of a new era for growth across this ad segment in India.

Some of the key trends that will potentially drive the growth of connected TV advertising are:

Increase in global CTV spends: A Nielsen report in the US stated that streaming viewership exceeded cable usage for the first time and that the average volume of streamed content consumed has beaten the 2020 pandemic-induced lockdown period. As a result, advertisers have gradually been allocating more money towards CTV, to the extent that ad spends in the US, according to e-marketers, are expected to increase by 14.4 per cent and exceed $26 billion in 2023. The CTV market in Europe has also grown substantially over the years. Here, ad spends have been projected to increase by 36 per cent after experiencing 56 per cent growth in 2021.

India is a smaller market in comparison to the US and UK, which started evolving only 3–4 years ago. That said, we are closing the gap fast. According to a report by EY-Ficci, CTV users in India are expected to go from 14 million to over 40 million by the end of 2025. CTV’s role as an impactful advertising medium is also steadily growing in India, and with brands across CPG, auto, BFSI, e-commerce, luxury, and many others showing great interest in the growing CTV space, this is set to grow further.

Sustained CTV viewership growth in India: With the increased investment in OTT and availability of premium content, Indian audiences are drawn to CTV’s convenience and regular stream of fresh, high-quality content. The OTT subscriber base in India, which is close to 97 million (media partners Asia report), is also on the rise, with DTH service providers actively bundling on-demand channels to tap the growing CTV audience. A mediasmart survey found that over 40 per cent of viewers spend four hours watching CTV content, and 84 per cent of households have more than one person watching shows on a smart TV. This presents a tremendous opportunity for advertisers to leverage AI-driven programmatic advertising to connect with the burgeoning CTV audience.

Growth of ad-supported tiers: The growth of OTT content on CTV has also led to an interest among brands to leverage the medium for advertising opportunities and brand storytelling. There has been some consolidation in this space—such as with Zee5 and SonyLIV, besides support for a SVoD model.

Leading OTT players like Disney+ and Netflix have also considered such pricing tiers for monetisation, beginning with introducing them in the western part of the world. Even so, there are local players like MX Player, JioCinema and aha that already provide AVoD content to attract viewers with free or cheaper plans. It just shows that with Netflix also entering the fray that there is a huge opportunity for advertisers to reach audiences via connected TVs.

CTV as a medium for interactive ads: Since the market still remains fragmented across linear TV, CTV and mobile devices, it is necessary to adopt a cross-channel strategy to connect advertisers with their audiences. An omnichannel approach increases the reach, though Nielsen data shows that 75 per cent of consumers struggle to correctly identify a brand the day after being exposed to their TV ad. Interactive advertisements do well to address this problem. Such CTV ads allow advertisers to connect with viewers and encourage them to participate, resulting in better brand recall. Studies have shown that interactive CTV campaigns deliver stronger results across key performance and attention metrics than interactive campaigns on mobile and PC. The Coinbase ad during the Super Bowl 2022 kept it simple by airing only a QR code encouraging viewers to download the app.

Besides, the technology platform allows one to measure the impact and learn about the viewer's preferences, and create new data points. In the new year, however, we will see more of these creative, interactive ad innovations that will improve CTV user engagement and experience.

CTV for app promotion & user tracking: CTV will also play a major role in becoming a sought-after advertising medium for owning the entire journey from discovery to purchase. It is not necessary to target smartphone users via the mobile route only because a mediasmart survey found that over 40 per cent of viewers spend four hours watching CTV content. Furthermore, according to an AppsFlyer survey, 40 per cent of consumers worldwide are influenced to download mobile apps after seeing advertisements for them. App developers will also begin to view CTV as a full-funnel medium, besides the conventional brands, to promote themselves to increase their install base. Here, a solution like CTV household sync will further enable brands to connect the disconnected worlds of TV and mobile, allowing them to track the entire user journey—from discovery on the large screen to action on mobile or even a footfall at the brand’s retail outlet.

Why continue to invest in CTV in 2023

Audiences are more connected than ever in both the online and offline worlds, making it hard for advertisers to determine what platforms to use to reach out to them. Many are looking to diversify by building omnichannel campaigns. CTV intertwines the offline and online worlds, building a great channel for efficient omnichannel advertising, and the year 2023 will see more budgets being allocated towards CTV ads.

It is interesting to note that the shift from traditional to CTV also means that advertising is no longer tied to prime time, a particular channel, or a particular show. This means that the same campaign could run at the same time on two devices that are watching different shows; and also, that different campaigns could run on devices watching the same show.

With more time being consumed on CTV, ad dollars will also eventually move in this direction as the Indian market will see growth for both SVoD and AVoD content on CTV. The industry is also looking at better technologies and innovations that will offer better measurement in this space, encouraging more brands to target the right audience, get relevant insights, and make data-driven decisions to include CTV in their media plans. In the coming year, success in this medium will be dictated by preemptive disruptive ideas to engage with a diverse, multilingual audience such as India.

The author of this article is Affle VP (India & SEA), mediasmart Nikhil Kumar.

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