Streaming ads are moving towards a new era of creativity, interactivity and dominance.
Until very recently, nearly every TV innovation had to do with content, not advertising. The remote control made it easier to change channels and select content. On-demand and DVR made it possible for viewers to watch content at their convenience rather than when it was aired. And streaming provided a more efficient way to deliver content to the screen. Through all these changes, the traditional TV commercial has stayed more or less the same.
But the tide is starting to turn. Streaming is a digital platform, which means that data, targeting, interactivity and much more are now accessible on TV. Two-thirds of households have a smart TV while nearly everyone has some device that enables streaming (including a tablet, computer or smartphone.)
Tony Marlow, global CMO of LG Ad Solutions, told this year’s upfronts we are in the beginning of a “CTV-first” advertising era. Traditional media companies and digital streamers alike took to the stage at the upfronts and NewFronts to announce a host of exciting new advertising innovations that, when added together, point to a future that looks nothing like traditional TV advertising.
One of the biggest shifts is that the line between content and advertising is getting blurrier as a result of social media. Ads aren’t just competing for attention anymore; they’re becoming part of the entertainment experience. Brands see the value of entertaining content, which will carry over to CTV.
Moving Away From The 15-Second Spot
One of the major catalysts for streaming has been live sports. As bigger audiences shift from linear to streaming for sports events, more premium advertisers and major media companies are starting to think about how to offer bigger and better advertising opportunities that deliver outcomes from captive audiences. A typical game can be a few hours long, providing ample room for ad format experimentation.
Amazon’s contribution this year includes a new “pause ad” option that will take the form of a semi-translucent ad on the frozen content screen. Other CTV ads that are being pitched include squeezeback ads that are particularly good for live sports and “companion ads” that can run side by side with content. AI can also be used to generate advertising that floats over content such as small logos or characters. While some of these elements have been used on linear TV, streaming makes it significantly easier to generate and deliver these types of ad formats at scale.
From Lean Back To Lean In
In July 2024, YouTube became the first streaming platform to lead total viewership at 10.4% of total TV time. YouTube may end up being the “gateway streamer” that helps the TV cross over from traditionally lean back to more lean forward. YouTube began as a website, is the second largest search engine after Google, has social elements including likes and comments and lends itself to a much more interactive experience.
Interactivity is becoming a much bigger part of the TV viewing experience across many major streamers. NewFronts and upfronts including many mentions of commerce-enabled ads that would link with a mobile experience or work with the click of a remote as well as gamification and content discovery.
Amazon, LG, YouTube, Vizio and Samsung all offer some kind of interactive ads, betting on younger audiences to embrace the TV as just another digital screen.
More Data, Automation And AI
There are a few reasons why new CTV advertising innovations will stick. First, they are targetable and measurable, two elements that are extremely enticing to advertisers. As more of their TV budget shifts to streaming, advertisers will have the opportunity to reach more specific audiences and understand more concretely how their ad spend drove outcomes for their business.
Second, technology has enabled advertisers of all sizes to create many different ads that look good and engage audiences on a TV quickly and affordably. This opens the floodgates to smaller advertisers that never tried TV advertising before and gives enterprise brands new opportunities to connect with audiences in a more engaging way.
The coming CTV golden age is the true emergence of digital advertising as the leader. Digital advertising was stuck in banner purgatory for two decades without much creative innovation because brands were still focused on linear TV. Now that audiences have embraced streaming, we’re already seeing incredible things on CTV and the sky’s the limit.
Joe Hall is co-founder and chief product officer at Spaceback.
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