Why CTV Advertising is About to Go Mainstream

The CTV advertising market is one that some people across the Nordics (and beyond) could be forgiven for dismissing. We used to call it IPTV, or VOD – so what’s really all that new about the ‘C’ here? Isn’t this just another gimmick?

CTV spend is accelerating rapidly, up almost 50 per cent in 2021 in the US for example. No other media is growing as quickly. Motion, big screens, better targeting, frequency and context controls are somewhat irresistible attributes for advertisers.  No less source than AdExchanger has called CTV “ad tech’s latest goldrush”.

However, as some have also pointed out, just look at some of the major streaming services: Netflix, Disney, HBO – they’re all SVOD, not an ‘A’ in sight.” (S is for subscriptions, A for ads.) In response to this, you might have said – well, in the Nordics our own local broadcasters are doing incredibly well, with a combination of both. There’s also the small matter of ad-supported YouTube, of course – though some say homemade how-to videos and staged pet rescues aren’t on a par with those investing in major award-winning films and series – so let’s leave that one aside for now.

SVOD to AVOD?

The major shift in how we view CTV, both here in the Nordics and worldwide, may in fact be well underway. And as so often, for better or worse, it begins in the US. Many of the newer (and older) broadcaster streaming services have hit something that looks like an upper limit of subscribers. How to keep growing? Of course, there’s more competition for subs right now (especially if your logo is red, I would argue). But the economics of CTV stretch further than just a simple question of the number of services people will subscribe to at any one time.

Covid lockdowns made us all homebodies, a captive audience, somewhat insatiable for TV. As some places open up, maintaining all of those loyal subscribers isn’t so easy, never mind growing their numbers. Another new consideration is the phasing out of government furlough schemes and other Covid grants. And with them, simply less money to spend on multiple services you’re not even using as you were in lockdown.

It’s no accident, given all of these factors, that such big names as Hulu, NBC and Discovery have all launched cheaper services, partly subsidised by ads. Paramount and HBO have done so too.

And to take one older, more established example - according to media reporter Sarah Fischer of Axios, “Hulu has long served as an example of how lucrative ads can be, even for subscription streamers. The majority of Hulu subscribers are on the ad-supported plan.”

‘All Boats Rise’

With the number of subscription services on the rise in the Nordics as elsewhere, the hockey stick of rising user payments was only ever going to last so long. And global broadcasters introducing anything new en masse – in this case, more affordable, ad-supported tiers – is likely to result in local TV channels and publishers experimenting in a similar direction.

So say what you like about CTV – it’s just VOD or IPTV with a new badge. It’s also more measurable than analogue, opens the door to smarter, easier multichannel campaigns, and we’re still understanding its full potential.

But please don’t say, when it comes to ad-supported, digitally-delivered TV, that it’s all about YouTube. With the majority of major players now offering blended AVOD and SVOD together, CTV advertising is unavoidable. It has finally gone mainstream.

Read more: eMarketer – CTV is still among the fastest growing channels in digital advertising