Traditional TV ads are in the midst of a big shake-up, and the move from regular TV to Connected TV (CTV) is more than just adapting to changing viewing habits. Advertisers are drawn to CTV because they feel it gives them better control over targeting and measuring campaigns.
Even though people are spending almost 50% less time on regular TV (from 4:37 hours in 2012 to a projected 2:46 hours in 2024), ad spending has only dropped by less than 5%. On the flip side, CTV viewership has doubled in the last four years, and ad spending has tripled during the same period, showing faster growth in CTV advertising.
CTV isn't just a replacement for TV; it opens up new opportunities for advertisers. Thanks to its digital nature, CTV allows for budget adjustments based on real-time data. Platforms like tvScientific, Vibe.co, and The Trade Desk make buying ad space on the big screen easier through automation.
Contrary to the idea that CTV spend is rising to fill the gap left by declining linear spend, CTV's extra dollars are also coming from budgets previously allocated to digital and mobile video. Advertisers see the creative potential, higher engagement, and greater accountability of CTV compared not only to linear but also to other advertising avenues like mobile, desktop, and PC.
Even as linear TV spending shrinks, it's still a big part of media plans because of the mistaken belief that Baby Boomers won't give up regular TV. But as traditional TV archives go digital, advertisers can now reach Boomers on CTV, debunking the myth.
The rise of shoppable CTV ads could speed up the shift from linear to CTV budgets. Companies are trying out directly selling products in TV shows, turning CTV into a potential shopping hub with its audio and video capabilities.
While the future of shoppable CTV isn't clear, it has the potential to change consumer habits and how advertising and content are created. CTV's future lies in complementing, not replacing, regular TV, much like how smartphones transformed phones into daily companions with extra features.
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