Digital Essays 2023: What you CTV is what you get

Making tailored advertising experiences possible, CTV advertising is not just future but also the present of television, says PHD’s Mazen Mansour

With digital and social media hoovering up ever-bigger portions of brands’ media budgets, many have been tempted to announce the terminal decline of major segments of the media landscape.

Even the longevity of TV is in question. This is too simplistic and blinkered a view though. All the signs of its digital transformation are there.

In fact, there is one more coming and it has the potential to radically revitalise the sector by creating exciting possibilities for viewers and advertisers alike. 

Connected TV (CTV) is more than just a buzzword or simply about connecting your TV screen to the Internet. It is a paradigm shift in how TV content is consumed, and advertising is served.

With CTV, advertisers can reach highly targeted audiences via this video content.

Despite the presence of prominent local players and a long list of benefits for advertisers, the MENA region has been relatively slow to fully embrace CTV advertising and demand now outstrips supply.

Broadcasters need to do more to entice users to interact with ad offerings on over-the-top (OTT) and CTV platforms.

Only a quarter of users of platforms like YouTube and Shahid access content through CTV, as the majority relies on mobile devices.

Other providers also have a significant portion of their inventory yet to be monetised. Despite their substantial user bases, prominent players like Netflix and Disney+ have not yet monetised their inventory because they operate on a subscription-based model (SVOD).

Maybe OEMs like LG and Hisense, which have entered the advertising arena by offering advertising space on their home screens, and Samsung, which has yet to do the same here, will turn this around and increase supply.

There are other reasons for the slow take up of CTV advertising of course. Problems such as scalability, frequency limits and fraud, especially the infamous CTV spoofing, are all issues to address but let’s look at the upside: reach, targeting, omnichannel, addressability, real-time optimisation, impression-based measurement and attribution.

In the coming years, programmatic TV planning will change the way we approach traditional television. To make the most of this change, the industry needs tools to measure the reach of traditional TV and CTV.

Programmatic TV also allows us to target specific audiences based on their demographics and interests, reducing wastage.

Unlike conventional methods, surveys and peoplemeters, programmatic TV focuses on measuring reach and views directly. This shift simplifies the process and ensures advertisers connect with the right viewers.

We know one of the key strengths of CTV platforms is their ability to cater to local tastes and preferences. Local content draws audiences in with culturally relevant shows and movies.

However, for these platforms to monetise effectively, they need international players, such as Disney and Netflix, to weigh in. Their participation will stimulate the content creation sector in MENA and enable local advertisers to tap into CTV advertising’s full potential.

As CTV advertising increases, there will be a move towards ad-supported models such as Ad Video On Demand (AVOD) and Ad-supported Subscriber Video On Demand (ASVOD).

This change highlights the essential role advertising will play in the viewing journey. As ad-free services cost more, there is a place for ad-supported alternatives.

Platforms like YouTube are adjusting their subscription offering, showing the significance of ad-supported content and securing steady revenue streams for CTV platforms.

Because of its limited scale, emerging nature and lack of competition, CTV prices will likely adjust once supply grows and dynamic pricing kicks in. In any case, CTV lowers the entry point for TV advertising.

People’s propensity to pay for TV content without ads depends largely on their purchasing power and the streaming options available. Currently, with few choices, users are willing to pay more to avoid ads.

However, as the market becomes more competitive and offers multiple platforms, users may change their behaviours. The decision also hinges on how future players price their subscription models: will they introduce pricier ad-free option, a cheaper ad-supported tier, or even a free service with ads?

In the USA, 86 per cent of streamers watch content with ads, of which 47 per cent exclusively choose ad-supported content and 39 per cent opt for a mix of ad-supported and ad-free content.

This data underscores the varied preferences and potential shifts in consumer behaviour based on pricing models and market competition.

By blending the features that made digital advertising so popular with marketers and agencies with the brand-building power of TV advertising, it seems fair to say CTV guarantees the future of television.

The gradual rise in ad monetisation in MENA shows we’re in the midst of a transformative era in television, one of personalised advertising experiences at scale. 

Mazen Mansour is a Director-Digital at PHD MENA