New CTV advertising niche grows rapidly

Publication date: 03 Jul 2019

In recent years, the advertising industry has undergone significant changes, and one of the key drivers of this process has been CTV advertising (Connected TV, advertising on internet-connected televisions). This segment is growing rapidly and is attracting increasing attention from both brands and advertising agencies. As content consumption increasingly shifts online and traditional TV loses its audience, CTV is emerging as a new niche with vast potential.

CTV advertising refers to ads displayed through devices connected to internet-enabled televisions. This includes devices such as smart TVs, gaming consoles, streaming boxes (e.g., Apple TV, Roku, and Amazon Fire TV), and other gadgets that allow users to access streaming video content. CTV advertising is primarily focused on video content delivered via platforms like Netflix, Hulu, YouTube, and various OTT (over-the-top) services.

CTV advertising stands out from traditional TV advertising in that it is more targeted and measurable. Brands can tailor their ads to specific demographic groups based on user preferences, behavior, and even geographic location.

In 2018, advertisers spent 750-800 million rubles on promotions via internet-connected TV screens and other devices. These budgets grew by 150-200% over the year, according to calculations by the IAB Russia advertising association. The document was developed by experts from Getintent and IMHO.

Connected TV (CTV), according to association analysts, includes smart TVs, TV boxes, media players, and gaming consoles. In 2018, the total number of smart TVs in Russia reached 21.5 million devices, with the format’s popularity growing rapidly. Since 2012, the number of connected TVs has increased sevenfold.

CTV advertising is sold by smart TV and set-top box manufacturers, TV networks, content aggregators, advertising agencies, and tech companies. Each vendor has its own targeting parameters and settings. A significant portion of CTV advertising inventory consists of video ads, typically 15, 30, or 60 seconds long, shown before, after, or during content playback.

In Russia, promotion on CTV screens is still a small niche within the internet advertising market.

According to experts’ forecasts, the CTV advertising niche will continue to grow rapidly in the coming years. This is driven not only by the increase in the number of streaming platform users but also by the development of targeting and measurement technologies. Most brands have already begun actively investing in CTV advertising to keep up with the competition, and advertising agencies are offering increasingly complex and effective strategies to reach audiences through this channel.

Some key trends expected to develop in the coming years include:

• Hyper-personalization: Artificial intelligence and machine learning technologies will enable even more precise targeting of ads based on users’ specific interests and behavior.
• Interactive shopping: The rise of shopping ads in the CTV format, where users can purchase products directly from their TV screens.
• Integration with other channels: CTV will increasingly integrate with mobile and desktop advertising, creating more holistic and cross-channel campaigns.