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State of the Screens

How TV Buyers Can Capture the Value of Digital Video

By April 18, 2018No Comments

A large portion of TV buyers have started adding digital offerings through connected TV advertising.

Connected TV users by year (% growth):
1) 2017–168.1M (↑ 10%)
2) 2018–181.5M (↑ 8%)
3) 2019–188.1M (↑ 4%)
4) 2020–191.6M (↑ 2%)
5) 2021–194.4M (↑ 2%)

Flashback: Connected TV Inventory Explodes, Video Advertisers Enjoy Results

Why do advertisers like connected TV advertising? It is the closest thing to TV ad quality with 97% completion rates without the viewability issues that have plagued mobile/desktop.

Why do networks like connected TV advertising? The CPMs that they can charge are 3–4X higher than mobile.

Quote from Randy Cooke — VP of Enterprise Solutions @ SpotX:
“While not yet a market of overwhelming reach, the ease with which CTV audiences can coexist within the traditional markets of TV provides buyers with tremendous flexibility in how they build GRPs across their DMAs. TV will remain a mass reach vehicle for the foreseeable future, but the ability to manage effective frequency across the CTV marketplace gives brands a new way to strategically use this flagship medium known loosely as TV.”

The average consumer will receive $313 in video ads this year.

Share of video ad spend per person (% of total):
1) TV — $235 (75%)
2) Digital video — $78 (25%)

TV accounts for the majority of video spend, but digital is growing rapidly.

Digital video spend growth by year:
1) 2016 — ↑ 35%
2) 2017 — ↑ 31%
3) 2018 — ↑ 19%
4) 2019 — ↑ 16%

Planning/buying TV and digital video together is the next big challenge in advertising which is why the IAB is launching a training program developed specifically for this topic.

Quote from Christa Babcock — VP of Learning and Certification @ IAB:
“We’ve seen an increasing skill set gap as a result of the increasing complexity in market… More so, we’ve heard increasingly from our members and partners that there is a distinct need to provide education on this topic.”

The curriculum includes:
1) Digital video and advanced TV ecosystems
2) Audience-based planning strategies
3) Programmatic video buying

Michael Beach

Michael Beach

Michael Beach is the Chief Executive Officer of Cross Screen Media, a media analytics and software company that enables marketers to plan, activate, and measure CTV and linear TV at the local level. Michael is also the founder and editor of State of the Screens, a weekly newsletter focused on video advertising that is a must-read for thought leaders in the advertising industry. He has appeared in such publications as PBS Frontline, The Wall Street Journal, The New York Times, Axios, CNBC and Bloomberg, and on NPR’s Planet Money podcast.