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Connecting with the New Living Room – The Future of TV

Patrick Morrell, Director of Partnerships, EMEA, at The Trade Desk

2020 was nothing short of phenomenal, triggering five years’ worth of digital TV transformation in just a matter of months. One thing can be certain: the acceleration of Connected TV (CTV) and new streaming consumption habits are irreversible changes, that are here to stay.

We gathered together experts from Samsung, Channel 4 and an agency partner to discuss the new living room environment and what it means for the advertising industry today and beyond…

Turning to TV under lockdown

Research by The Trade Desk (April 2020) found that 58% of Brits signed up to a new streaming service under the first lockdown. Similarly, Channel 4’s Digital Programmatic Lead Alex Wright noted that the channel has seen a significant increase in viewing on its All 4 platform, with Channel 4 having its best ever quarter, month and week in viewing in Q1 2020. Meanwhile, Andy Jones, Samsung’s Head of Agency Development, reported that there’s been a steady decline in the use of linear set-top box connections – down 20% from Q1 2019 to Q2 2020.

Digital-second to digital-only

CTV is just one channel – and plenty of others have gone digital before it – so why is this shift so notable? TV is arguably the most impactful advertising channel, and so brands tend to spend more on TV advertising than any other channel. In most cases, TV is also the starting point; a strong TV ad will often kick off an ad campaign and then inform the rest of the activity, with leftover budget and existing creative being directed towards other channels. That’s why, as TV changes, everything else will change too.

TV is the trojan horse of digital advertising. It is this channel that will take us from digital-second to digital-only, transforming the advertising industry forever. Smart brands will increasingly look to advertise exclusively across different digital channels where the consumer journey can be accurately mapped and understood. A General Manager of a key agency partner argues that “Now is the time for agencies to learn about the potential of CTV, and shift from treating it as an ‘add on’ to including it as a key part of any omnichannel campaign”.

A solution to suit all

Advertisers are already cognizant of the benefits of advertising through CTV. Channel 4’s Alex Wright observed that “there’s increasing appetite from advertisers to access premium CTV inventory, as brands realise the powerful combination of appearing next to premium content, in an environment where consumers are highly engaged as well as having huge reach”.

And consumers aren’t just engaged with content on CTV, we’re also seeing a growing appetite for advertising – our research found that a significant one-third of UK consumers would pay a maximum of just £10 per month on streaming subscriptions, which amounts to a maximum of one or two services, showing there is a limit. So, how can the industry meet the consumer desire for varied, premium content, without a hefty price tag? The obvious solution is advertising-funded streaming (AVOD).

AVOD gives consumers the content they want with the freedom to choose when to watch it, without having to pay for access. And our research suggests consumers are open to this, with seven in ten reporting a preference for seeing more relevant advertising, over paying to watch more TV. Ads will enable streaming services the freedom to serve audiences with premium content, for low or no cost; It’s a win-win-win for advertiser, platform and consumer alike.

Time to learn

While there’s no question about the opportunity that CTV presents for advertisers, we’re by no means at the end of the journey. Across the ecosystem – from agency, to tech partner to hardware provider to TV publisher, we need to work closely together to optimise this exciting channel and make it work well for everyone.

In a world of uncertainty, there’s one thing we can all agree on - we’re entering the golden age of connected television.

If you'd like to know more about the CTV opportunity and how to leverage the channel effectively, please get in touch with your TTD team

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