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3 Advertising Realities Marketers Need to Face to Reach Consumers in 2020

After months of people stuck at home during COVID-19 shutdowns and social distancing, and multiple platforms launching including NBC’s Peacock, connected TV (CTV) has grown at a quicker rate than previously predicted. Per Deloitte, the average U.S. consumer now pays for four different services, up from three pre-pandemic. Furthermore, Conviva found global CTV viewership was up 63 percent year-over-year in Q2.

Tal Chalozin, CTO & co-founder, Innovid

Tal Chalozin, CTO & co-founder, Innovid (Image credit: Innovid)

This shift in viewership means that CTV advertisers will need to adjust their strategies accordingly. The situation presents a unique opportunity for them to reach consumers with increased reach and frequency. But there are also some considerations that must be addressed. With this in mind, here are three ways that COVID-19 is impacting CTV advertisers.

TV will become more measurable with a performance-orientation.

While brands are adjusting spend, temporarily pulling investment from certain channels and platforms like print and digital out-of-home (DOOH) media, they are shifting dollars to CTV. According to the IAB, more than 35 percent of marketers have now moved budget to CTV, while "traditional" advertising is down 39 percent. Advertisers are simply following consumption trends. CTV was always poised to grow this year, though the pandemic has accelerated the channel's maturation timeline.

Yet as more dollars flow to CTV, advertisers will seek to justify their spending through more performance-oriented campaigns. This means investing in interactive ad formats that command a greater engagement lift than standard pre-roll and offer the potential for real earned time and attention. The push for performance also means a larger desire to partner with publishers who can share granular, in-depth data about campaigns. Transparency has never been more important.

COVID and political advertising will drive record demand and increase pricing pressure on brands.

At the beginning of the pandemic, political advertising on CTV fell substantially. This had to do with two things. First, the Democratic primary had been all but decided, with Joe Biden defeating Bernie Sanders as the presumptive nominee. With a cleared field, fewer dollars were being spent until the general election started getting ramped up. The second reason for the pause is COVID-19. Election messaging wasn't necessarily in line with the type of content most are looking for at the beginning of the pandemic, which is hopeful and uplifting.

However, now those dollars are coming back. In August, the Biden campaign reserved $280 million in paid media,including a record-breaking $60 million in digital media, focused on CTV. As we get closer to the election, Biden, Trump and their backers (Super PACs, for example) will flood even more money into the CTV market, buying up supply and putting pricing pressure on brands trying to engage with at-home audiences. With no clear end in sight to the pandemic, we should expect record inventory demand, and in a space where its inventory is already scarce.

Creative will need to be more thoughtful and personalized.

One of the biggest reasons advertisers paused spending at the beginning of the pandemic was to reassess their campaign creative. Suddenly, ads that would have otherwise been relevant were now taboo because of the pandemic. Hershey, for example, had to pull ads with hugs and handshakes. Similarly, a study by Pattern89 found that social media creative featuring images of human contact was down 30 percent. Overnight, what was once considered normal has now been upended. Five months into the pandemic, advertisers still need to make sure their ads are in tune with our current situation. New ads, like the one released by Heineken, must relate to the current environment.

This is especially challenging as different regions grapple with different stages of the pandemic. CTV ads in New York, for example, should be different from those that run in Texas. That’s why we're likely to see more advertisers embrace advanced creative or Dynamic Creative Optimization (DCO) technology for video. DCO’s promise is in making it possible for advertisers to adapt creative at scale. It allows brands to create relevant CTV experiences by using flexible templates and a decision tree to modify creative based on a variety of data signals. COVID-19 is forcing marketers to take a more personal approach across CTV platforms, and DCO is the lever for accomplishing that.

Innovid is the only independent omni-channel video advertising, creative and analytics platform.