With Connected TV (CTV) viewing on the rise in the UK as elsewhere it seems that marketers are failing to fully capitalize on the advertising opportunity.
A new report from Teads, a digital advertising platform, found that half (49%) of marketing decision-makers don’t understand CTV’s key advantages, whilst over a third (31%) don’t understand its disadvantages as a marketing channel. Further, six in 10 UK marketers never include CTV advertising in their strategy.
“Clients and agencies are trying to understand the value proposition of the CTV space,” explained Dan Black, Head of CTV at Teads UK.
One issue common to the UK as the U.S. is the fragmentation of the market including from the proliferation of FAST channels.
“Globally CTV is still relatively under invested versus the number of eyeballs that have switched over from linear,” Black said.
eMarketer estimates that by 2026 there will be 47.9 million CTV users in the UK, a statistic quoted by in the Teads report.
In Europe and the UK there’s an additional wrinkle where the CTV market remains dominated by Broadcast Video on Demand (BVOD) such as ITVX and the newly launched free streaming service Freely from the BBC, ITV, Channel 4, and Channel 5. BVOD in the UK is measured by traditional TV audience currency Barb, which helps support planning of campaigns across a range of channels.
“As more FAST channels come to market marketers want to know more about the content proposition, what audience is it reaching and how this can be measured in order to extract value,” Black said.
Comparative to the U.S., the CTV market in the UK is still relatively nascent “and is not likely to reach maturity for a number of years,” said Teads MD Justin Taylor.
“As such, there is a certain degree of hesitancy over the value of ad-supported CTV driven mainly by their limited awareness of the benefits of CTV and perceived high cost in comparison to some other marketing channels.”
The Interactive Advertising Bureau (IAB) expects CTV ad spend in the UK to reach £2.31bn ($2.92bn) by 2026, while IAB projects U.S. CTV ad spend to reach an estimated $22.7 billion in 2024.
Over a third of marketing decision-makers in the Teads report cited cost as a barrier to investment - underlining the lack of knowledge, given that the cost of premium CTV is much lower relative to prime-time linear TV. Measurement and attribution challenges were cited by 17% of respondents as barriers.
The research revealed somewhat contradictory consumer behavior. On the one hand over a third (34%) of viewers are happy to view CTV ads provided these ads are “funny”, or relevant to their tastes (31%) and placed within apps with affordable price tags.
However, the new data also found a sizeable 37% of UK viewers currently opting for ad-free plans despite the growing availability of cheaper ad-supported alternatives such as from Amazon Prime, Disney or Netflix. It also showed that two in five (40%) consumers say they try to ignore ads when they can.
According to Black, this means marketers need to adopt a more creative approach to advertising to engage these audiences.
New technologies, such as QR Codes, AR (Augmented Reality) and data-driven targeting capabilities can help to create “tailored and memorable” ad experiences, he said.
Teads used the study to spotlight its ‘CTV Native’ ad unit, which is inventory positioned on the home screen of smart TV platforms. It partnered with TVOS player VIDAA earlier this year to extend the reach of its CTV Native inventory on Hisense smart TVs.
“Given that 37% of people in the UK opt for ad-free streaming subscription plans, CTV Native advertising on a home screen is one of the best ways to effectively reach this audience via a big screen, as well as those who like to watch broadcaster content online (BVOD),” Black said.