The advertising landscape is rapidly evolving, and 2024 is shaping up to be a pivotal year for digital video and Connected TV (CTV). Video ad spend is expected to rise by 16% year-over-year, driven by the deep penetration of CTV and digital video in U.S. households. Brands are increasingly interested in these mediums due to their extensive reach and the improved ad experiences offered by streaming services and other publishers.
1. Ad-Supported CTV is Widely Adopted and Preferred
CTV has become a staple in many U.S. households. As of 2022, 93% of U.S. internet users are reachable by CTV. Streaming services have adapted by offering more subscription options, often ad-supported, which have been well-received by consumers. At the IAB NewFronts, LG AdSolutions revealed that 80% of CTV viewers appreciate ad-subsidized subscriptions, recognizing the value exchange of lower costs in return for watching ads. Additionally, 69% prefer ad-supported CTV over other models.
How Viewers Choose Content on Smart TVs
LG AdSolutions also shared insights on how smart TV users decide what to watch:
Recommendations from family and friends (44%)
Homepage of streaming app (40%)
TV home screen (39%)
Social media ads (25%)
TV commercials (23%)
The TV home screen and streaming service homepages are critical touchpoints where CTV viewers spend significant time, averaging 11 minutes and 38 seconds between turning on the TV and starting content. This makes these areas prime real estate for ad integration. Social media also plays a vital role, both through ads and recommendations, influencing viewers' content and purchase decisions.
2. CPG and Retail: The Biggest Spenders and Fastest Growers
Consumer Packaged Goods (CPG) and retail sectors are leading the charge in digital video spending. CPG brands are projected to spend $12.6 billion on digital video in 2024, up 20% from 2023. Retail is expected to grow even faster, with a 30% year-over-year increase, reaching $7.4 billion.
These industries rely heavily on building brand awareness at the top of the funnel, making substantial investments in digital advertising to tap into the broad U.S. household penetration. Digital video provides a measurable and addressable channel, allowing for targeted campaigns that maximize return on investment. For instance, B2B ad spend in digital video is set to climb 22% in 2024, surpassing $4 billion, with platforms like LinkedIn integrating CTV into their ad offerings to meet this growing demand.
3. Influencers and the Role of Social Media
Influencer marketing is set to see a global spend of $35.09 billion in 2024. A significant portion of marketers (26%) have reported allocating 40% or more of their marketing budget to influencers, according to Statista. CTV is a crucial channel for enhancing influencer campaigns, bridging the gap between social media and television advertising.
The influencer marketing platform Influential is at the forefront of this trend with its Influential 360 campaign tool, which manages and measures cross-channel campaigns. At IAB NewFronts, Influential CEO Ryan Detert highlighted a multi-channel campaign for Whataburger that utilized influencers on social media, CTV, and digital out-of-home (DOOH) advertising. This holistic approach demonstrates the effectiveness of integrating influencers with CTV to amplify campaign reach and engagement.
ConclusionThe rise of digital video and CTV in 2024 is driven by several key factors: the widespread adoption and preference for ad-supported CTV, significant investments from CPG and retail sectors, and the growing influence of social media and influencers. These elements collectively contribute to the booming landscape of digital video advertising, offering brands extensive reach, precise targeting, and effective engagement with their audiences.
For more in-depth insights and strategies on leveraging digital video and CTV for your brand, read our full blog on our website.
Stay ahead of the curve and maximize your advertising potential in 2024! 🚀
Key Takeaways
1. Ad-Supported CTV Adoption:
High Reach: 93% of U.S. internet users can be reached via CTV.
Consumer Preference: 80% prefer ad-subsidized subscriptions; 69% favor ad-supported models.
Prime Ad Spots: Smart TV home screens and streaming app homepages are key areas for ads.
2. CPG and Retail Leading Spending:
Top Spenders: CPG and retail sectors are major investors in digital video ads.
Significant Growth: CPG spending is projected to rise 20%, and retail spending by 30% in 2024.
B2B Integration: Platforms like LinkedIn are incorporating CTV to support growing B2B ad spend.
3. Influencers and Social Media Impact:
Growing Spend: Influencer marketing is expected to reach $35.09 billion globally in 2024.
Cross-Channel Campaigns: Integration of social media, CTV, and digital out-of-home ads boosts campaign reach and engagement.
Expert Insight
The boom in digital video and CTV in 2024 is driven by:
1. Extensive Reach and Viewer Preferences: CTV's widespread reach and viewer preference for ad-supported content make it an attractive platform for advertisers. Smart TV interfaces and streaming app homepages are prime spots for ads due to high viewer engagement.
2. Strategic Industry Investments: CPG and retail sectors heavily invest in digital video for brand awareness and targeted advertising, optimizing their strategies for better ROI through measurable and addressable ads.
3. Synergy of Influencers and CTV: Influencer marketing enhances reach and engagement by bridging social media and TV advertising, demonstrating the effectiveness of multi-channel campaigns.
These factors highlight the importance of digital video and CTV in modern advertising, urging brands to leverage these mediums for maximum impact in 2024.
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