Connected TV is Gaining Popularity, and Here’s What It Means For Marketers

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Razvan Luca, VP of Media

TV remote pointing to a screen with many different channels displayed

Video advertising has long been a reliable method for brands to reach their intended audience. This form of advertising always finds new ways to captivate the audience and evolve the way marketers can connect with them. The television industry has gone through many changes – like when specialty TV joined conventional TV channels, providing marketers with a means of reaching a national audience across a specific interest. The introduction of PPM (Personal People Metre) was also a key development, giving advertisers a means to measure out-of-home television viewership.

As the end of 2022 nears, a momentous change is coming – the popularity of advertising through connected TV. Ultimately, connected TV refers to any TV that is connected to the internet. This can happen through a combination of smart TVs (i.e. Samsung), streaming devices (i.e. Roku) or game consoles (i.e. PlayStation). Today, roughly ¾ of Canadians have connected TV capabilities. Thanks to the profound impact of television and the customization and measurement of the digital ecosystem, this trend provides marketers with new and exciting opportunities.

Big Players With Big Plans 

While 80% of Canadians now subscribe to at least one over-the-top (OTT) subscription service (like Netflix, Amazon Prime or Tubi), not many premium streaming services have activated an ad-supported video-on-demand (AVOD) model – until now. Two of the biggest players, Netflix and Disney+, recently confirmed their plans to roll out AVOD between late 2022/2023. Disney+ has even gone a step further, announcing their AVOD plan will carry four minutes of ads for every hour of content. Given the traditional TV model has historically carried 16 minutes per hour or 4x more, this approach should help deliver more of a captive audience for advertisers to connect with through the platform. 

As advertisers start to transition away from traditional TV, we will be able to execute more data-driven activations and maximize video performance and scale. But it won’t happen overnight. Given that as of spring 2022, the average Canadian adult 25-54 is still watching 18.2 hours of traditional TV (vs. streaming 11.7 hours across devices), we are still a while away from a complete revamp of our television advertising ecosystem.

More Impactful Opportunities For Video Advertising 

For the time being, we can expect the emergence of connected TV capabilities to mirror other digital video efforts like YouTube or programmatic/publisher direct buys. It will likely be used adjacent to traditional TV anchored video buys (medium-large scale budgets) or activated independently to drive more cost-efficient video efforts while harnessing the power of digital (lower scale budget).

Either way, connected TV opportunities will provide marketers a means of reaching their intended audience through larger, and more impactful, screens while also setting the stage for what the modern video buying ecosystem will look like. We saw what programmatic capabilities were able to bring forward to the traditional digital ecosystem, and we are now starting to have a glimpse of what that ecosystem will look like on our television screens.