Connected TV now fastest-growing segment in advertising

Marketers plan to dramatically increase their budget commitments to connected TV (CTV), according to the latest SteelHouse survey of both brand-side and agency marketing professionals.

The survey, conducted by independent consulting firm Advertiser Perceptions, found that more than three-quarters (78%) of marketers surveyed plan to buy ad inventory on streaming TV within the next 12 months and while only 2% of those surveyed said they never used video in their ads, 49% use video frequently, 38% use it occasionally, and 11% use it in all campaigns.

The data also showed that an average of 30% of total advertising budgets are allocated to digital video across multiple channels, with 28% of that going to social platforms, 26% to in-stream, 20% to traditional local or national TV, and 13% to in-unit ads. But the survey found that it was the newest category, CTV, also described as IPTV or OTT, that made the strongest impression, garnering 12% of planned video spend.

The survey also found video measurement was still evolving. The top three KPIs for evaluating video inventory were completion rates (49%), impressions/reach (46%), and quality scores including viewability & fraud (44%). However, SteelHouse found that there were differences between marketers and agencies. Marketers identified impression/reach (48%), completion (47%), and click-through (44%) as the most valued metrics, while agencies chose completion (53%), quality scores (45%), and in-target delivery/GRPs (comScore, Nielsen, etc.). Sales attribution was low for both (28%).

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How are TV homes growing if pay TV is shrinking?

Nielsen reports that the number of TV homes has expanded to 119.6 million for the 2017-2018 season. For the 2016-2017 season, Nielsen said there were 118.4 million TV homes. Between 2011 and 2013 the number of TV homes contracted.

As televisions households continue to expand, the number of homes with pay TV continues to decline. The number of pay TV subscriptions in the U.S. has fallen from 104.1 million in 2010 to 98.7 in 2016. Two-thirds of the decline came in the four years between 2013 and 2016.

Does this mean there has been a big increase in television sales over the period? Not really. Television shipments in the U.S. have remained at about 40 million a year for the past six years. Shipments even declined a little between 2015 and 2017, from 40.2 million to 39.5 million.

So, if television sales have not increased and pay TV is declining why is the number TV homes growing and what are people watching?

What are the new TV homes watching?

The source of content for these new television homes is coming from two primary sources. The first, and perhaps biggest, group is streaming video to their TVs. Over the past three years, the penetration of enabled smart TVs has almost doubled, from 14% to 27%.~ At the same time, the number of homes using a streaming media player has increased from 18% to 29%.^

The second source of content for these new television homes is good old antenna television. Between Q1 2015 and Q1 2017, the number of homes watching television with an antenna increased from 12.5 million to 15.2 million. However, almost all the increase in antenna homes came from homes that also have broadband. In those home, it is likely people use both broadcast television and streaming services on the big screen.

Why did the number of TV homes increase?

It could be that people are just keeping their television sets a little longer. Streaming media players are a cheap way of watching streaming services on non-smart TVs. They are also a great way of getting all the latest apps on an older smart TV that may not be able to deliver a good experience with the latest apps.

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http://www.nscreenmedia.com/tv-homes-grow-as-pay-tv-shrinks/