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Connected TV Giving Ad-Supported TV a Boost, Researchers Find

Erin Firneno John Giegengack
(Image credit: Advertiser Perceptions Hub Research)

Instead of killing off TV advertising, streaming is now seen as making it grow as more viewers turn to add-supported connected TV.

Researchers at Advertiser Perceptions and Hub Research teamed up to study CTV from both the consumer and advertiser perspective and found that more viewers accept advertising and media buyers are increasing their spending to reach those viewers.

“The best days of ad-supported TV are ahead of us, not behind us,” said Jon Giegengack, principal at Hub Research. “Significantly more people watch ad-supported than ad-free platforms, and the combination of exclusive content, lower cost and a less disruptive ad experience will keep ad-supported audiences high.”

“Advertisers should get out of their comfort zone and explore all the innovative ways to advertise on CTV,” said Erin Firneno, VP, business intelligence at Advertiser Perceptions. “Publishers can grow the category by promoting their unique offerings, whether that’s scale, unique audience, exclusive content or shoppable ads.”

Also: Watch Giegengack and Firneno discuss their findings in the video below.

Their study concludes that CTV growth isn’t about avoiding ads and that most CTV viewers are willing to watch ads if it will save them money or allow them to watch exclusive content.

Among those who consider themselves tolerant of ads, 72% said they’d watch ad supported TV if it saved them between $4 and $5 a month. Even among those who called themselves ad intolerant, 30% said they’d go with an ad-supported platform over an ad-free version to save $4 to $5.

The more targeted ads enabled by CTV contributed to viewer satisfaction with ad-supported programs. Among those who watched a show on an ad-supported platform 44% said they were highly satisfied, but 60% said they were highly satisfied when the ads were “customized for me.”

A majority of advertisers (54%) said they plan to increase their CTV advertising over the next 12 months.

Most advertisers see CTV in a supporting role in their TV planning, with 51% saying they plan linear TV first. One third said they plan both linear and CTV together and 15% said they plan CTV first. 

Advertisers are buying ads from CTV devices, AVOD services and vMVPDs, but only 32% are buying from all three.

“Advertisers need to test and learn across more of the available platforms – particularly as CTV incorporates more ad formats, from display to interactive ads – and make greater use of personalized advertising. They also need to break-out of their buying silos. Currently, only one in three advertisers buy across all three main inventory sources. Meanwhile, publishers need to differentiate their offerings more thoroughly,” the study concluded. ■

Jon Lafayette
Jon Lafayette

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.