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Is CTV growing out of its infancy?

Hardly any other topic is currently as present as Connected TV (CTV) and the associated opportunities for the advertising industry. The use is there, because consumers are spending more and more time with this form of digital moving image. In a recent study, technology-focused marketer Goldbach Germany examined the prevalence of CTV and the perception of advertising within this environment. ADZINE spoke with Mario Neumann about the results as well as overarching developments in CTV.

ADZINE: The "Advanced TV Study" has now been conducted by you for the sixth time. How has CTV usage developed over the last six years?

Mario Neumann: From 2017 to 2022, CTV usage has skyrocketed. We see almost a doubling in weekly or regular and daily usage. The pandemic with more in-house media consumption has once again led to stronger growth and awareness. CTV has thus arrived in the breadth of advertising-relevant target groups.

ADZINE: Compared to the U.K. or the U.S., however, the CTV market in this country is still developing. Why is the DACH region lagging behind?

Neumann: I can't confirm across the board that the German market is supposedly lagging behind. The markets started at different times and under different market conditions. The U.S., for example, has always been a cable market with a large variety of private providers, and the technical conditions were also much more in place. Streaming is on par with the TV market there. Overall, this market has grown so rapidly that advertisers have freely followed the motto "media money follows reach."

CTV in the UK is not really very different from us in my opinion, only the capitalization volume is higher due to the larger market. The change in media usage and its effects are very similar to us. What's striking here, though, is that when it comes to streaming reach, BVOD and SVOD content are still very much in the forefront - rather than ad-supported content providers.

ADZINE: When do you think CTV usage will overtake that of linear TV? Will CTV completely displace linear TV?

Neumann: Displacement is not to be expected. In my opinion, we will see coexistence because both systems still have their place in the media landscape. There will always be households that receive via cable or satellite. Likewise, there will always be content that is offered in a linear fashion. However, CTV and linear providers will increasingly converge. The challenge for the industry here: Changing media usage behavior must also become measurable and bookable. But the market will certainly create a convergence that will integrate CTV and linear. This will be highly exciting for media planners.

ADZINE: New, ad-financed streaming providers are entering the German market all the time. What is your assessment, have we reached the peak? Will we increasingly see takeovers and mergers of providers here?

Neumann: I don't think we've reached the peak yet. Since we are in a special interest cosmos, there will always be publishers who will occupy a new and further niche or offer additional content. There will probably be limitations with regard to the capacities of the platforms as well as the findability of the content. Consolidation will have to take place here to make it easier for all parties - also in advertising marketing.

ADZINE: Won't consumers eventually become annoyed because the volume of advertising in the CTV sector is increasing so strongly? At the moment, it always sounds as if CTV advertising is the promised land.

Neumann: Viewers are known to be annoyed by irrelevant and too much advertising. That's why it's so important that advertising fits and is well dosed. According to our study this year, 60 percent of 16- to 49-year-olds accept advertising in the CTV environment. Just under a third of respondents said they remember advertising and talk about it with friends. Advertising would be accepted by 70 percent of users in the target group of 30- to 49-year-olds if content were free in return.

Digitization and its associated functions have led to a new type of advertising consumption that is influencing the entire media landscape. We are seeing a real dynamization of the advertising block. Here, of course, CTV will also influence linear TV. And that offers new avenues for advertising, especially in addressing target groups. Targeting, environment and attention are the new key words here, which play out advertising to the right target group in line with the content consumed, without wastage. Relevance through targeting is the USP in CTV planning.

ADZINE: But what kind of advertising do consumers actually want to see in the CTV environment? What role will the home screen play in this?

Neumann: Good question - a key issue in CTV: Consumers want to see relevant advertising above all. Advertising that entertains them and is smoothly embedded in the device environment. Here we see a remarkable change: the home screen is becoming more and more important. According to our latest study, 57 percent of the target group aged 16 to 29 already see the user interface at startup and do not enter the program directly. So this is where the opportunity for initial contact with the brand already arises. It is not the channel that is started, but the start interface of the device or provider that is screened.

ADZINE: In the advertising industry, the focus is increasingly on attention as a metric. Is viewer attention higher with CTV advertising than with linear TV?

Neumann: It's safe to assume that metered, highly targeted advertising will generate greater attention and response in the CTV environment. It can also make a difference if you're interrupted by just two 15-second spots instead of a six-minute commercial break. In CTV, you have precision-fit advertising through targeting and content parameters described at the outset, such as the ability to control frequency. This offers advertisers completely new opportunities to advertise on TV. For example, a car dealership can advertise different models to different target groups on a regionally targeted basis. And car brands, to stay with the automotive example, can also play spots for different models of a car brand at the same time in different channel contexts. Even within the spots, you can A/B test with different dramaturgy. And all that in real time.

ADZINE: How well equipped do you think the German adtech landscape is for the supposed rush to CTV advertising?

Neumann: I think it is very well positioned. The central point is that, despite all the differences between the systems, you should be able to work with all the relevant interfaces. This requires a "universal plug". Those who manage to combine the requirements of "traditional" broadcasters with the advantages of online scheduling as well as CTV-specific features will succeed well. Here, adtech providers are at a particular advantage, as they were able to profit early on from the change in media use and invest in further development.


You can also find the interview here: https://www.adzine.de/2023/04/entwaechst-ctv-den-kinderschuhen