The CTV Landscape—4 Trends You Need to Follow in 2023
The OTT and CTV landscape is constantly changing, so what’s making the biggest headlines in adtech today?
First and foremost, performance.
About 35% of large advertisers indicated improving media efficiency among their top media investment goals in 2023. Advertisers also listed being able to measure ad performance among their top reasons for CTV advertising between 2022 and 2023.
But that’s no big surprise, given that most ad budgets are highly scrutinized in times of economic turmoil. Subsequently, more advertisers are seeking partners and solutions to streamline CTV ad-buying and campaign measurement — over 50% of ad buyers are focusing significantly or somewhat on platforms that leverage first-party data and cross-platform measurement.
But besides the economy, what the heck else is going on? Here’s the scoop on the most noteworthy trends impacting the CTV landscape in 2023.
1. Measurement gets deeper and more standardized
In response to industry demand, measurement of TV advertising continues to shift from a GRP-based methodology to impression-based. In other words, it’s moving from one-to-many to one-to-one. And the most accurate measurement of impressions will consider views across CTV devices.
“Impressions give us a standardized measurement, it’s consistent, gives us more accuracy — we’re not leaving any viewers on the cutting floor, they’re all being counted. In today’s world, that’s critical for our clients.” — Bill Sally, EVP of Sales at Nexstar Broadcasting Group
One of the biggest opportunities for advertisers will be combining new forms of panel data with ACR data (automated content recognition). Companies are pioneering a new kind of panel that measures digital advertisements across linear, OTT, and streaming video. This new type of panel even measures across traditionally untouchable environments, like walled gardens and video games.
Panel technology helps marketers understand behavior across all internet-connected devices in the home — whether someone’s watching Amazon Prime on their Roku TV or Netflix on their iPad. The result is a holistic picture of each individual’s behavior.
“With these new technologies, we get directionality that we can integrate with what we already have to create a score for greater precision in persona-based targeting. In other words, we have a much more accurate picture of who’s sitting on the couch—and who isn’t.” — Adam Helfgott, Founder and CEO of Madhive.
2. More advertisers adopt audience-based targeting
Connected TV (CTV) advertising is poised to become more advertiser-friendly in 2023 as media companies and advertisers look to address the rise in streaming viewership as well as platform consolidation.
With many media companies offering ad-supported tiers (Netflix and Disney+ launched theirs in November and December 2022, respectively), advertisers have more opportunities than ever to engage audiences with relevant ad content tailored to consumer lifestyles and tastes.
With all of these options on the table, advertisers will be able to adopt more advanced persona-based targeting options to reach viewers whose lifestyles align with the brand’s products or services. For example, a retailer may choose to reach budget-conscious but fashion-forward shoppers. An auto dealership may look to target outdoor enthusiasts that enjoy adventure movies.
This persona-based targeting offers a stark contrast to the contextual targeting linear buyers are used to, but we’ll see more and more advertisers adopt the approach in 2023.
3. The industry invests in shoppable ads
In 2022, the TV industry was on fire, unveiling bold, new consumer technologies.
Sony launched Bravia Cam, a webcam now included with its high-end smart TVs, which allows viewers to control their TV sets with hand gestures, receive alerts when they’re sitting too close to their screens, and automatically adjust built-in webcams to optimize Zoom calls.
Innovations like these proved TVs are no longer just screens for watching shows, and we’ll see even more interactivity in 2023 with the rise of commerce-driven ads.
The Interactive Advertising Bureau (IAB) revealed that commerce-driven advertising channels would get more attention in 2023 since nearly one-third to one-half of ad buyers plan to shift their investments towards shoppable and retail media network ads.
Streaming companies like Roku are working towards integrating shoppable ads into their platform. The company recently established a pilot partnership with Walmart, allowing consumers to click on shoppable ads from the retailer to make direct purchases using the Roku platform.
YouTube already expanded video action campaigns (one of Google’s interactive ad types for video) , which invited viewers to continue shopping on the advertiser’s website via their desktop or mobile device. But Roku’s solution doesn’t require a second device—just use your TV remote. This reduces the friction between first impression and transaction, improving the likelihood of conversion.
Expect to see more CTV platforms producing shoppable ad formats—and more buyers using them to drive conversions—in 2023.
4. Adtech gains efficiencies through automation
There’s no question that advertising operations processes are modernizing, but maybe not as quickly as some programmatic buyers need. TV buyers are often stuck jumping between various platforms and spreadsheets to effectively optimize and improve CTV campaigns in flight, making it difficult to reach the right target audience.
The good news is that as more of television is delivered digitally, there are more opportunities for improving campaigns before, during, and after their flights. Innovative technologies like machine learning and AI are beginning to play a role in automating the process by automatically optimizing campaigns and generating real-time insights.
“There’s been this shift as CTV is becoming more important — instead of being treated like an extra piece of inventory that can be monetized, it’s moving into something that’s actually quite valuable because it’s where the consumers are.” — Adam Helfgott, Madhive
TV buying teams often spend so much time managing the manual aspects of their buys that it leaves them little bandwidth to focus on their larger strategic direction. Automation of campaign planning and monitoring will bring significant efficiencies to the process of advertising on CTV — from targeting effectively to finding premium CTV inventory to measurement and retargeting.
As the advanced TV space matures, automation will only become more ingrained in ad tech platforms and the industry at large.
“Automating the pre-buy process has been game-changing. We do it with less time spent, and we can use that time to do other things. We need automated makegoods, we need automated stewardship and we need optimization.” — Jennifer Hungerbuhler, EVP and Managing Director of Local Video and Audio Investment at Dentsu
A final word on the CTV landscape
Don’t get too comfortable — the world of video advertising moves at lightning speed. Where are data privacy regulations heading next, and what the heck is the Metaverse? We’re likely to see continued changes to adtech and the CTV landscape as these trends continue to evolve.
You might also want to check out: 7 TV Advertising Trends to Follow in 2024