Brand Advertisers Say CTV Likely to Overtake Mobile

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Netflix’s first ad-supported subscription launched last week, and Apple’s plan to sell video ad inventory next year means the company’s own ad-supported tier for TV+ is almost certainly on the way. Change is clearly happening in the streaming CTV space, and both advertisers and audiences have strong opinions about how they see things advertising shaking out.

Advertising spend for connected TV increased by 60% in 2022, to $14.4 billion, as more brands found ways to blend the reach and impact of linear TV with the performance and transparency of digital marketing. According to a new report on connected TV trends by AppsFlyer, 98% of brands believe CTV advertising has the potential to be bigger than mobile, but just 64% of businesses are currently running direct response campaigns on CTV.

AppsFlyer found that gaming consoles are one of the most overlooked opportunities within the CTV space, even by advertisers that say they’re interested in focusing ad spend on smart TVs. Some of the most watched CTV in 2022 is happening on gaming platforms.

In addition to highlighting some missed opportunities for brand advertisers, the AppsFlyer report also identifies clear areas for future growth.

AppsFlyer surveyed 200 employees at gaming, retail, and fintech companies, specifically focusing on those in director to c-suite roles in their companies’ martech and marketing departments. Those executives indicated they are planning to increase CTV advertising budgets by an average of 44% next year, primarily as a way to tap into growing consumer adoption. Nearly all businesses (98%) believe that CTV advertising will be bigger than mobile advertising, and a quarter of respondents said they think this will happen in the next two to three years. 

“As we’re only starting to discover the potential for performance marketing in CTV, and with mobile continuing to grow as one of the most prominent marketing channels — as it did over the past 12-plus years — it is fascinating to me to see how these two, mobile and CTV, will invent new ways to coexist,” says Brian Quinn, president and general manager at AppsFlyer North America.

According to AppsFlyer’s survey, the top reasons brands advertise on CTV include engaging with new audiences (73%), increasing engagement levels (73%), and driving higher lifetime value (50%).

Unfortunately, there is still a disconnect between what brands believe will happen within the next two years and how they are allocating their ad budgets currently.

AppsFlyer identified missed opportunities when it comes to how brands target consumers by the content they are watching. Currently, the top content categories brands are targeting are not aligned with the content that consumers are actually viewing. For example, 64% of brands are targeting sports and fitness content, while just 42% of consumers are watching this content. In the other direction, 62% of consumers say they are watching documentary content, but only 26% of businesses are targeting that content.

Moving forward, Quinn sees a clear shift happening as brands move from considering CTV and TV advertising as a unified channel for brand awareness, to CTV being put into its own category and viewed as a performance-based alternative to linear television.

Until recently, linear television had been considered an expensive and isolating brand play, particularly because it has been difficult to convert viewers from one device to another. Additionally, there hasn’t been enough insights available to enable advertisers or OTT platforms to gauge viewers’ behavior or preferences.

“Marketers and CTV publishers are still finding innovative ways to effectively use the CTV-to-Mobile flow,” Quinn says. “This is a tremendous opportunity for any brand, and once we establish industry standards for tapping into it, the potential here is huge.”

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.