Connected TV in the era of personalization and profiling
How customization is transforming the TV viewing experience
This is definitely a well-established topic now!
Connected TV (CTV): as we are aware of it, it’s already in use, there is data showing its effectiveness, and it’s available to everyone. But it’s much more than just an advertising channel; it represents an epochal and philosophical shift.
Thanks to its ability to engage users of all generations, CTV has radically transformed the way audiences can be reached. It represents a new horizon for consuming television content, offering benefits for both businesses and users.
The adoption of this not-so-new technology is growing exponentially, demonstrating the marketing potential this media channel can offer. Considering that the major streaming content platforms have reached over 5 million people worldwide through advertising, it’s easy to understand why 88% of Italian marketers have shown interest in investing in this type of ads.
CTV is changing the advertising landscape, ushering in a new era of personalization and profiling. With its streaming capabilities and the Internet of Things (IoT), it provides a tailored and engaging content viewing experience.
We don’t have to wait to see how it will turn out; it’s already a rising channel. This market is estimated to exceed $150 billion by 2032.
Considering that there are an estimated 18 million Connected TVs in Italian households alone, brands can gain extensive visibility by integrating this channel into their advertising strategy. Ads displayed on large screens have a greater visual impact compared to other digital advertising channels, creating a stronger connection with the audience and consequently increasing brand awareness.
The CTV ecosystem is continuously expanding and offers a wide range of tools that can be used to reach one’s target audience. Among these tools are:
By the end of 2023 (which is tomorrow!) Smart TVs are expected to establish themselves as the primary device not only for video viewing but also for a wide range of other activities. With the development of this technology, we will witness its application in every type of interactive digital activity, and a future where we can admire artworks or make purchases is not far away.
PROFILING ON CONNECTED TV: ENGAGEMENT AND PERSONALIZATION
TV has always played a social role by providing information and entertainment, representing a source of family togetherness and a companion for those living alone. However, users now are constantly seeking original, high-quality, and primarily on-demand content (75%), and this need can no longer be satisfied by linear TV. Just as traditional TV has adapted in the past, CTV can now meet this evolving demand, becoming the preferred channel. CTV is today’s TV.
The ability to hyper-segment brand communications and create personalized ads helps meet viewers’ demand not to be bombarded with irrelevant or uninteresting advertisements. For users, this is the key to receiving truly relevant messages. Profiling should not be seen negatively; it contributes to an enhanced better viewing experience overall.
By opting for profiling, users can watch only what genuinely interests and captivates them in terms of movies, shows, and advertisements, eliminating irrelevant, annoying, or uninteresting ads once and for all. CTV offers a personalized and engaging content experience where films and advertisements are no longer imposed but rather chosen. With this in mind, we can say that CTV represents the new era for television advertising, appealing to all generations.
Targeted campaigns make users feel understood and valued, as they are specifically tailored to them. In this way, it increases awareness, trust, and loyalty toward brands capable of delivering such personalized experiences. In fact, 59% of advertisers have reported that investing in CTV advertising has boosted brand awareness.
Users can discover new products, services, or content that they might not have otherwise considered, expanding their choices and enriching their overall viewing experience. The data proves it: of the users who saw an Ad on CTV, 43% of them proceeded to search for the product. Among those who searched, one-third visited the brand’s website, and 1 in 5 actually made a purchase.
And then there’s the Second Screen. With the aim of creating an omnichannel strategy and leveraging the users profiled, the use of the Second Screen (such as a smartphone or tablet) during the viewing experience can make a difference. In fact, half of those who watch content on Connected TV frequently or almost always use a Second Screen. Integrating the Second Screen into campaigns allows users, who are increasingly multitasking, to interact with the ads by scanning a QR code when the ad appears on the screen.
CONNECTED TV: STATE OF THE ART AND FUTURE CHALLENGES
Among the sectors integrating In-Game Advertising into their digital strategies, the automotive industry stands out. During the pandemic, Connected TV became extremely popular for brands in the industry, leading to a 35% increase in investments in the second quarter of 2020. Once brands embarked on this path, they never looked back: in 2022, 68% of their global video impressions came from this channel. The shift of advertising budgets towards CTV and its ability to reach specific market niches are evident.
At Tangoo, we have witnessed firsthand the benefits of CTV through the results of our client’s campaigns. For instance, with a beverage brand, we used a video strategy to increase brand awareness, investing in both Connected TV and Video Streaming Players. Under identical conditions (i.e., video content, duration, budget, and campaign length), Connected TV achieved the best performance: a viewability of over 95% and a completion rate above 84%, compared to the viewability of 87% and a completion rate of 66% on Video Streaming Players.
In the rapidly evolving landscape, CTV may intersect and merge with AI, gaming, web3, and augmented reality. Meeting the technological challenges in this already digital and programmatic environment is crucial, with a unified evaluation metric expected by the end of the year.
Looking ahead, it is likely that the imminent breakthrough will concern linear broadcast channels where each ad will be tailored to the individual viewer, with increasingly vertical communication, facilitated by technological advancements. Brands will strategically engage in the customer journey with targeted communications and ad creatives tailored to individual profiles.
Concluding with a quote from Sherry Turkle,”Technology is not only a matter of machines but of how these machines change the way we live and think”.
We are facing a completely new scenario compared to the past: previously, advertising, much like the TV schedule, was passively endured by viewers. And we have all experienced, at least once, not finding anything interesting and settling for a movie or program that we didn’t actually follow, using commercial breaks as the ideal moment to do something else (does the word “channel surfing” ring a bell?).
Today, the scenario has transformed. Users construct their own TV schedule, and thanks to profiling, even the advertising moments integrate into a totally new, interesting, personalized, and, above all, engaging experience. What was once a disruptive moment has become part of the viewing experience, turning viewers into active participants.
All the prerequisites for CTV to become an even more relevant medium for advertisers and users are in place. Taking steps to prepare today is the first stride toward being at the forefront tomorrow.