GroupM, IAS reports highlight complexity of navigating the connected TV landscape

Research shows changing ecosystem of players and advertising opportunity as well as the consumer engagement and data challenges facing brands in the connected TV space

Four in five connected TV viewers are comfortable with some of their data being shared with advertisers and half are ok with brands knowing what shows they’re watching regularly, a new report claims.

The findings come as a fresh study by GroupM into brands and media opportunities post-pandemic highlights the complexity and opportunity around TV and streaming content in a rapidly changing landscape dominated by US-based streaming providers.  

A new report from Integral Ad Science (IAS) into adoption and attitudes around connected TV (CTV) and streaming found 59 per cent of its 500 Australian respondents were not comfortable with anonymous demographic data about them, such as gender and age, being shared. An equal number are not comfortable about sharing the amount of time they spend viewing TV. However, only 20 per cent are against any data being shared with advertisers for a better ad experience.

According to the report, connected TV advertising is more acceptable to consumers than linear TV, with 92 per cent agreeing features of the CTV ad experience made it superior to its traditional counterpart. However, the report also made clear advertising is still a less welcome experience for most, with the ability to skip certain ads the top feature on the list (51 per cent). This was followed by shorter ads (44 per cent), fewer ad breaks (40 per cent), shorter ad breaks (39 per cent) and fewer ads overall (37 per cent).

By contrast, one in 10 reported liking the ability to interact with ads they’re interested in on CTV. What’s more, 17 per cent appreciated the relevance of advertisements against personal preferences.

In terms of current CTV ad experiences, 39 per cent of respondents said they are skipping ads when given the option, and 37 per cent reported “always seeing the same ads”. Despite this, one-quarter usually sit through the ads while streaming.

In addition, the IAS report found 41 per cent of respondents find it very important or important that ads are relevant to the content they are watching, and 49 per cent will view an ad to completion if it fits this bill. The most popular ad supported content on connected TV was YouTube (74 per cent of Australian consumers), followed by broadcast and cable TV channels (54 per cent).

Overall, the IAS report found 89 per cent of consumers surveyed to be streaming content on CTV devices, with smart TVs the top device of choice. This was followed by Chromecast (37 per cent) and PlayStation (27 per cent). Just shy of nine in 10 use an additional device while streaming content, and 17 per cent will look up advertised products on their mobile phones while watching CTV.

Streaming and the advertising dilemma

Even as advertisers grapple with the current CTV environment, a GroupM report into how brands can emerge from the shadow of the COVID-19 global pandemic shows just how rapidly the streaming market continues to change, adding further complexity and challenges for the TV advertising ecosystem.

The Emerging Stronger: Building Brands in a Transformed World report reiterated the consumer shift towards streaming viewing and claimed that while TV might remain superior to most other alternatives, advertising against premium TV content is likely to become more expensive and have less of a halo effect in future.

What’s clear already is that global streaming services are gaining increasing importance in television. US-based streaming players are rapidly establishing dominance over the global TV industry outside of China, with giants such as Netflix, Disney, Amazon, AT&T’s Warner Media and ViacomCBS spending billions of dollars on content each year they’re increasingly delivering direct to consumers.

“Collectively, the globally focused media companies are already spending many tens of billions of dollars on content every year and are now competing against media owners whose operations are both geographically constrained and financially limited in terms of the capital they can readily access,” the GroupM report authors stated.

As a result, consumers will increasingly view content in dedicated streaming environments. It’s a shift that’s picked up in the past year thanks to the COVID-19 pandemic.

The changing nature of viewing will see a growing share of the content consumers watch on TV sets remaining ad-free, making the medium less useful for achieving reach and frequency, GroupM claimed. For example, the media agency highlighted the difference between linear and CTV advertising ratios in the US: 16 minutes on linear TV, and 3 minutes on streaming TV per hour.

Then there’s the upsides. One is the rise of new video services that incorporate advertising, especially those from free-to-air broadcasters. Wider use of streaming platforms also brings greater opportunities for addressable advertising.

“Marketers will still be able to manage against reach and frequency as they always have, although it might be more expensive. For example, using normal approaches to buy television ad inventory, every incremental percentage point of reach is more expensive than the one that came before it,” the GroupM report authors argued.

“In the past, it might have been both very expensive and technically difficult to buy marginal points of reach. Addressable advertising may also make it easier to deliver ads to those audiences, although costs will likely be higher than in a world where everyone only watched conventional linear TV.”

In response, GroupM global head of partnerships, Kieley Taylor, said now is the time for brand marketers to assess their comfort across a spectrum of video contexts, from tentpole to premium to creator to gaming and user-generated content. She also flagged the growing prevalence of in-auto and virtual reality.

“Developing and conducting informed test-and-learn strategies this broadcast year will pay back dividends across your future year investments,” she added.

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