Will ad-supported CTV be the winner of this year’s Upfront? Tony Marlow, CMO of LG Ad Solutions, thinks so. He makes his case here.
1) For starters, CTV continues to take a larger share of the buy, especially as we see ad-supporting viewing options reaching substantial scale. Advertiser Perceptions data found that 40% of upfront buys are going to be allocated towards CTV/streaming. This shouldn’t come as a surprise to anyone, since we know AVOD viewership is now gaining real scale among audiences: data from a recent study we conducted called “The Big Shift” shows that 30% of consumers have removed a subscription CTV service from the household in the last 12 months while 25% have added a free ad-supported CTV service during that time. And we expect this trend to continue as 31% are planning to remove a subscription CTV service in the next 12 months while 23% are planning on adding more free ad-supported CTV services during that time.
2) A fast-growing component of ad-supported streaming are the FAST channels themselves. During the Upfronts/NewFronts conversations, I anticipate that content will be a big deciding factor in where brands decide to allocate TV spend. CTV has seen huge growth in content over the last year, especially when it comes to live sports. Content, including live sports events, is the driving factor of what brings consumers to specific apps– and also FAST channels. The reason FAST services have been so successful is because they are built on a combination of great content and a sophisticated ad strategy designed around more relevant and less intrusive ads. We anticipate seeing a lot of interest for FAST channels this NewFronts season.
3) Finally, Upfronts buying decisions will also be driven by very familiar challenges advertisers seek to overcome – fragmentation, reach, results, efficiency. And that’s also why CTV is going to be a winner. With the scale of today’s streaming audience, advertisers of every size are finally seeing how easy it is to include CTV in a media plan to get advanced, granular targeting, as well as precision measurement, delivering greater ROI than linear channels. CTV is a mature, time-tested, proven performance channel and is therefore highly appealing to media buyers at a time when ad dollars need to stretch further.
Advertisers experience this best with a direct-to-glass strategy. And that’s why this year’s Newfronts will be the year of the OEM. When working with an OEM with a massive global footprint, advertisers gain scaled first party inventory and data enabling that targeting, as well as a deep understanding of what’s hitting the glass which helps control frequency, and minimize ad waste. Other players in the CTV space are realizing this and trying to join the OEM party with some new entrants to the OEM marketplace.
4) And this also goes for HOW media buyers buy. Although the majority of CTV is still bought though IOs, preference for programmatic buying in CTV is really coming into its own, and so we would expect buyers who prefer this streamlined, simple “single-point-of-entry” to bring these same considerations into their upfronts decisions.
