Is Connected TV Advertising Right for You?
Time spent watching traditional TV has been on the decline for some time now. And while linear is not dead, streaming is quickly gaining momentum and taking over.
Streaming Is on the Rise
In fact, according to Insider Intelligence, 2023 will be the first year that U.S. consumers will watch more video on digital sources like Netflix, YouTube and TikTok than on linear TV.
According to the report, daily TV time is expected to fall to two hours and 55 minutes in 2023, while digital video/streaming time will increase to three hours and 11 minutes. Of total daily time spent watching TV, linear is expected to have a 48 percent share while digital video/streaming is projected to have a 52 percent share.
Other impressive statistics from Kantar's Entertainment on Demand study include:
- From September to December 2022, the number of households with video streaming rose 2.5 million, reaching a total of 115.6 million households. This makes household penetration of video streaming now at 89 percent.
- Households using multiple subscription services are also climbing. The average household accessed 5.4 different streaming services, up from 5.2 in Q3 2022. Additionally, 7 percent of U.S. households added a new streaming service in Q4 2022, up from 6 percent in Q3 2022.
Without CTV advertising in the mix, advertisers may miss out on a large percentage of their audience–almost half (46 percent) of U.S. households are only reachable on streaming TV, according to an MRI Simmons 2022 November Cord Evolution study.
Demographics of Streaming Users
According to one survey, 70 percent of millennials (ages 18 to 34) use video streaming services compared to 49 percent of baby boomers (aged 65 and over) who had access to at least one streaming service. However, audience demographics tend to vary depending on the streaming service.
For example, according to research by Nielsen, 43 percent of households with children age between the ages of 2 to 17 subscribe to Disney+ compared to 45 percent of those age 55 and older using Tubi.
Investments in Connected TV Advertising
With more households turning to streaming services, advertisers are following suit and investing big in CTV (Connected TV) advertising, a form of digital advertising that appears within streaming content. According to eMarketer, CTV investments in the U.S. grew by 41 percent year-over-year in 2020, to over $9 billion. In 2025, this number is estimated to be over $24 billion.
Statista estimates this number to be over $38 billion in 2026.
Benefits of Connected TV Advertising – Precise Audience Targeting
With TV viewing clearly trending toward streaming services, CTV offers an amazing opportunity for brands to get in front of specifically targeted audiences at the individual household viewer level.
While linear television is great for live events and to reach older demographics, targeting is based on geographical markets, show and airtime, and does not allow for the more advanced targeting capabilities available through CTV.
With CTV on the other hand, brands can define their target audience down to some very finite details. For example, brands can target by insights such as:
- Interests
- Hobbies
- Income
- Household composition such as children in the household
- In-market shopping behaviors
- Consumers who have recently moved
- And many other demographics
For instance, when it comes to demographics, are you targeting movers in your marketing outreach? If not, you should be – and CTV advertising is a tremendous opportunity to get in front of this high-spending audience. According to the 2022 Porch Group Media New Mover Trends Report:
- Movers spend approximately $11,000 during the move. This includes products and services purchased before moving and up to 1 year after the move.
- Before the move is a highly valuable time to engage these pre-mover consumers. In fact, 72 percent of new movers buy new products and services prior to moving.
- 90 percent of new movers stated they would likely try a new brand or company for any products or services.
Connected TV Measurement and Attribution
As connected TV continues to grow, CTV measurement and attribution is increasingly important for advertisers. Metrics that are usually measured in CTV advertising include cost per completed view (CPCV), cost per acquisition (CPA), or average order value (AOV).
While linear TV advertising is highly untrackable, CTV can be evaluated to see how it drives short-term sales and can also provide an understanding of what successful campaign performance is attributed to.
For example, if a consumer sees an ad on linear TV, they may later search for the brand on Google before visiting the brand's website. This action cannot be attributed to the TV spot, but rather it will be credited toward the search engine.
However, if a consumer sees an ad on CTV, that click can be tied to the CTV ad because the audience is defined ahead of time – the brand knows precisely whom they are targeting.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Larisa Bedgood is VP of marketing from Porch Group Media.