In recent years, video consumption has shifted significantly to digital. Connected TVs (CTV) are now widely used in Germany, with consumers spending more time streaming video content. A new study by technology-oriented marketer Goldbach Germany indicates that Germans are also noticing more advertising in the CTV environment. ADZINE spoke with Mario Neumann of Goldbach about the study's results and current developments in the CTV sector.

ADZINE: Hello Mario! You've conducted the "Advanced TV Study" for the seventh time. How has video consumption evolved over the past seven years? What have we observed in CTV usage?

Mario Neumann: The increasing availability of internet-enabled televisions has led to a booming market for on-demand platforms and streaming services. More people prefer to watch content digitally on-demand rather than stick to fixed broadcast times. This trend is reflected in a rapid increase in awareness (72 percent) and usage (56 percent) of Connected TV in the DACH region. This development is accompanied by an increase in ad-supported content and ad spending on CTV platforms, as advertisers recognize the potential of CTV as an effective advertising platform and increasingly invest in advertising on these channels.

ADZINE: What are the requirements for large-format video advertising today?

Neumann: The key requirement is targeted advertising. This is increasingly enabled by the use of data: data can be collected at the device or household level in CTV, as well as based on viewer behavior. The measurability and attribution of advertising in CTV thus resembles online systems, allowing advertisers to precisely analyze and evaluate the success of their campaigns. The quality of advertising content also plays a crucial role.

ADZINE: Your latest study results show that consumers in Germany are increasingly perceiving advertising in the CTV environment. Is this because more advertising is being aired or has something changed?

Neumann: The increased perception of advertising in the CTV environment is not due to simply airing more ads. In fact, our study results show that 51 percent of CTV users notice ads in their TV's additional features. The main reason for this is the improved targeting options, which allow ads to be more personalized and relevant. Additionally, advertising materials are becoming more creative and dynamic, inviting viewers to dive deeper into the content or visit campaign pages. Innovative ad formats such as CTV Ads, which reach viewers before they open apps or start a TV program, play a significant role. Moreover, ad blocks in CTV are shorter than in traditional television, leading to increased attention. As viewers in CTV often find themselves in a more thematically specific, or 'special interest' environment, their involvement in TV consumption is generally higher, contributing to a stronger perception of advertising.

ADZINE: The current economic crisis could significantly boost the advertising landscape in the streaming sector. Consumers are increasingly price-sensitive and seem to be transitioning to ad-supported streaming services. How do you currently perceive this development?

Neumann: We observe a changed media consumption behavior, heavily influenced by economic uncertainty and rising living costs. In particular, we note an increase in the use of ad-supported content, confirmed by our study this year: consumers on average use more free apps (3.0) than paid ones (2.5). Additionally, the study shows that 56 percent of users of paid apps would be willing to accept advertising if it makes the content cheaper. These trends lead to a growing supply and use of CTV, which in turn increases the attractiveness of this channel for advertisers and leads to higher advertising investments.

ADZINE: It is often said that consumers want to see relevant advertising. How can the CTV environment ensure that consumers are shown the advertising they actually want to see?

Neumann: Providing relevant advertising in the CTV environment can be effectively achieved through the comprehensive use of targeting options. Viewers can be addressed specifically on socio-demographic, technical, and contextual levels. The use of content metadata for contextual targeting allows for even more personalized and relevant ad placements. Additionally, performance tracking in CTV allows for precise measurement and analysis of advertising campaign effectiveness. For example, it is tracked whether interactions on the advertised website via the second screen occur after airing a spot. Furthermore, geotargeting and predictive personalization, which make predictions about future viewer behavior, increase the accuracy of targeted advertising.

ADZINE: CTV has long been a hot topic and is likely to remain so. Many adtech providers have specialized accordingly. The market is highly competitive. In which areas do you think there will be consolidations in the near future?

Neumann: Consolidations are expected in several key areas of the CTV market in the near future. In particular, content providers and streaming services could merge as the market reaches saturation and only the strongest players will prevail. Consolidations are also expected in the area of adtech platforms specializing in data-driven advertising and programmatic advertising. These developments are likely to also affect technology and infrastructure providers, who may seek mergers to integrate their technologies and offer more comprehensive solutions. These consolidations aim to increase efficiency, reduce costs, and create more competitive, holistic offerings in the fiercely competitive CTV market.

ADZINE: Let's take a look into the future. What major developments within the CTV landscape do you expect to see in the German market in the next five years?

Neumann: Over the next five years, the German CTV market will continue to grow, with a continued increase in programming and streaming services. A key topic will be the integration of artificial intelligence. AI will be increasingly used to deepen data analysis and provide viewers with an even more relevant content experience. In particular, real-time adaptation of CTV advertising based on viewers' individual needs and behaviors will be driven by the use of AI. A particularly interesting aspect is predictive personalization, which allows for more efficient advertising placements based on behavioral patterns. These technologies will revolutionize media planning and advertising delivery. Additionally, innovative ad formats and the concept of 'Commerce Media', which concerns the interface between retail and CTV advertising, are expected to gain importance.

ADZINE: Thank you for the exciting interview, Mario!

The article can also be found here on Adzine.