Connected TV advertising: What brands are missing out on by ignoring this emerging medium

The rapid growth of CTVs has piqued the interest of marketers and media planners to reach out to their audiences.

Connected TV (CTV) viewing in India has witnessed a 31% increase since last year, revealed an Interactive Avenues and Matterkind report titled ‘Decoding the Connected TV Ecosystem in India’. The FICCI-EY report 2022 stated that CTVs have increased to 10 million in India and predicted that it will increase to 40 million by 2025. With the rapid growth of CTVs, it has emerged as a touchpoint of interest for marketers and media planners to effectively reach out to their audiences.

Connected TV is a television that is directly connected to the internet and can stream content on the big screen. This can be a smart TV or it can also be connected to the internet through streaming media player devices, gaming consoles or internet enabled set top boxes. The growth of CTVs is being driven by the reducing cost of the internet, the growth of streaming services, increased interest in OTT content, rise in streaming devices and increased purchases of Smart TVs.

It is rapidly emerging as an ideal medium for brands to directly target their audiences. With connected TV, brands are able to advertise on the large screen and at the same enjoy the benefits of digital advertising, like targeting, measurement and interactivity.

Currently, in India, only Samsung offers advertising on its television devices through its advertising division Samsung Ads.

“We offer ads on our millions of Samsung Smart TVs in the region, where we work with advertisers to position content and brands within the native TV viewing experience. This also includes in-stream video ads served during short commercial breaks on our free, ad-supported streaming TV service, Samsung TV Plus which now has over 70+ channels in India many of them local,” said Prabhvir Sahmey, senior director - India and South East Asia, Samsung Ads.

However, brands can advertise on connected television through apps like YouTube and other ad-supported OTT platforms. These could be ads, placed on the homepage of the device as a video or static ad. It can also be pre-rolls or mid-rolls within the content. There are also interactive ads. For example, the colour of the car in an automobile ad can be changed or a test drive can be booked while watching an ad. These features are currently available for mobile devices, but are soon expected to be available for television as well.

The CTV audiences are younger, more affluent and more internet savvy. ‘Decoding the Connected TV Ecosystem in India’ report states that this audience has a refined lifestyle and financial habits. They are also avid entertainment buffs with 43% owning multiple TVs, 53% owning more than three paid OTT subscriptions and 43% spending at least an hour watching OTT shows daily.

This makes it an ideal medium for categories like automobiles, BFSI, jewellery, beauty and cosmetics, home improvement, luxury travel, and media entertainment. As its reach is currently limited to urban areas, brands that focus on these regions tend to advertise here.

Sahmey said the majority of its clients in India are ‘non-endemics’ – brands that do not have a presence on TV in the form of streaming apps or TV channels. “It includes brands such as MG, TATA, Castrol, MAC Cosmetics and Universal Pictures. Many D2C brands are also adopting Samsung Ads rapidly,” he added.

CTV allows brands and media planners to target and measure their investments to get advanced reporting and insights about their audience. Siddharth Dabhade, managing director, MiQ India, China & SAARC, believes that CTV should be in every advertiser’s media mix today for its unparalleled reach for cord cutters in India. MiQ offers advertising solutions for CTVs globally.

“Connected TV has already overtaken linear TV budgets in the US, and it is the future of TV advertising. Eventually, linear TV programming will fully move to the streaming space. Today it is an effective medium for advertisers to achieve full funnel impact with higher average view through rates of 95% and video completion rates of 97%,” he said.

Paras Mehta, business head, Matterkind India, the programmatic arm of IPG, highlights three key benefits of advertising on CTV - budget, targeting and reaching the younger audience. Since the younger generation are disconnecting from linear television and increasingly consuming content on connected devices, this is a great medium to reach out to them.

“Advertising on television comes at a huge cost. But with CTV there's no barrier with regard to the budget, since advertisers are buying impressions and not spots. One can start a campaign with a budget as low as Rs 5 lacs. Moreover,it is not a pan-India campaign and advertisers can specifically target their viewers. Thus viewers can see different ads based on their interests and preferences,” he said.

Dabhade suggests a few other benefits. “It is also possible to retarget on other screens, like mobile, tablets or PCs. And call to action is possible through QR codes or landing pages,” he said.

While there are many other avenues to reach out to the digital audience, the CTV audience is found to be more engaged and highly receptive to advertising. Gavin Buxton, managing director, Asia, Magnite, an independent sell-side advertising platform, said since the quality of the content on OTT platforms is quite high it draws in a certain audience and the intent of purchase is also higher here.

“Within this environment, the ads get higher visibility, have a higher completion rate and are non-skippable. So it is a great medium for brands to get their message across. As compared to social media or user-generated content, which also enable brands to reach the audience, this is a more positive space. Those platforms are more for killing time than for a grey experience,” he said.

Despite its advantages, the medium is yet to take on scale in the country. Baskar Subramanian, co-founder and CEO, Amagi, a media technology company that provides targeted advertising solutions for CTVs, says advertisers are still on the fence due to concerns of reach and measurability.

“While CTV allows one to measure viewership and impressions there are challenges of transparency. The industry needs to create a transparent system to build trust. The data needs to be validated. Third-party monitoring capabilities have to exist. The other question is the metric. We need to have something equivalent to the gross rating point (GRP) of linear television. An agency is looking at this as a continuum to the television. We need a comparison model,” he said.

Being a new medium, advertisers are yet to fully understand its value. Dabhade said being a non-click environment, some advertisers still consider measurement metrics like click-through rates to see the impact of the campaign. Innovating and improving the quality of CTV creatives is another challenge.

“As brands bucket CTV ads under programmatic, they do not innovate or spend as much as they do on creatives compared to TV commercials. This reduces its impact,” he said.