REUTERS/Eduardo Munoz
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- TV streaming is still dominated by ad free services like Netflix. But ad supported TV streaming is surging.
- The number of ad impressions delivered via "connected TVs" skyrocketed by 178% last year, according to ad tech firm Innovid.
- At the moment, OTT ad spending is still a fraction of the $70 billion TV ad market in the US. But its expected to grow rapidly. The ad tech firm SpotX predicts connected TV ad spending will approach $1 billion globally by 2020.
- That's providing a glimmer a hope for TV advertisers who are worried about evaporating live TV ratings.
People aren't just streaming tons of Netflix and Amazon shows on their smart TVs. They're starting to watch more content with ads.
That should provide a glimmer of hope for TV networks and TV advertisers, both of which are grappling with declining audiences for live TV.
Over the past year, the number of ad impressions delivered 'over the top,' that is, through services like Hulu and Crackle to TV networks apps, surged 178%, according to the video ad tech firm Innovid.
During that same period, the number of OTT advertisers jumped by 28%, said the company, which helps place ads within both TV and web video content.
To be sure, Innovid doesn't see every single OTT ad. But the company says its tech is plugged into 55 million households, so it has a solid vantage point when it comes to gauging macro video ad trends. In fact, Innovid has just put out its annual Global Video Benchmark report.
"We're seeing an inflection point for OTT ads," said Innovid president Beth-Ann Eason. Last year, OTT ads represented about 150 billion impressions, or roughly 17% of the total digital ad inventory Innovid tracked. This year that number is on track to hit 28%, she said.
"What's amazing to us is the speed of growth," she said. "The adoption of that medium is just incredible. And the audiences that are available for advertisers are the kind that are not readily available in linear TV."
Indeed, given the opportunity with OTT ads, companies are jockeying to control as much of that space as possible, including Roku and increasingly Amazon, as Business Insider reported.
At the moment, OTT ad spending is still a fraction of the $70 billion TV ad market in the US. But its expected to grow rapidly. The ad tech firm SpotX predicts connected TV ad spending will approach $1 billion globally by 2020.
Given those stakes, Eason said it was crucial that media companies don't screw the OTT opportunity up by overloading screens with too many ads. So far, she's been encouraged, given the broadcast networks' recent public pledges to cut down on ad overload, on apps and on linear TV.
Among the report's other highlights:
- Besides the growth of connected TV
advertising , more advertisers are using data to better target consumers in video ad campaigns. Last year the firm saw a 58% jump in the number of data-driven video ad efforts. - More people are showing a willingness to interact with connected TV ads. Although TV is thought to be mostly a passive experience, Innovid tracked a 28% engagement rate in 2017 for OTT campaigns.
- And custom interactive ads enjoyed a 237% lift in engagement (e.g. clicking on an ad using their remote controls to get more information or share an email address).