by Nuno Andrade, chief innovation officer of Media Culture
Looking ahead to 2024’s media landscape, there’s no denying the industry has been in the process of a transformative shift with both viewership and advertising. Marketers need to adjust accordingly, as streaming platforms continue to outweigh traditional TV in viewership numbers. What we’ve seen this year, especially, demonstrates streaming is also becoming the new frontier for ad-supported content.
Connected TV (CTV) has remained at the forefront for television consumption, providing content directly through internet connections on large-screen televisions versus Over-The-Top (OTT) content, which can be accessed through connecting to devices such as a gaming console or desktop. Many of the major streaming services increased pricing options for ad-free watching within the past year but are still seeing viewers accepting the lower-tiered pricing plans that include ads, making it a prime opportunity for marketers to invest in CTV advertising.
Here are a few key things to understand and properly advertise with CTV heading into 2024:
CTV Audience Expansion and Advertising Revenue on the Rise
The last several years have marked a pivotal shift in viewership patterns. Streaming surpassed cable for highest viewership for the first time in July 2022, and this monumental trend shows no signs of slowing. CTV captivates a younger and broader demographic, delivering personalized, on-demand content – with the average CTV viewer being a significant 16 years younger than their Linear TV counterpart.
This user base is set to expand rapidly over the next few years, aligning with a newfound potential for advertising revenue. By 2027, it’s projected that CTV ad expenditure will constitute 42% of the total CTV/Linear ad spend, a considerable increase from 29% in 2023.
The modern streaming landscape boasts a wide assortment of platforms for users, each with distinct business models and audiences. From subscription/ad-supported video on demand (SVOD/AVOD) platforms like Netflix and Max to free ad-supported streaming tv (FAST) options such as The Roku Channel and live streaming entities like YouTube TV, the breadth of offerings ensures content for every viewer’s preference and creates valuable opportunities for advertisers.
The Evolution of Streaming and CTV
When YouTube was launched in 2005 as a video-sharing platform, few could have predicted the rapid progression of streaming in the ensuing years. Notable players like Netflix and Hulu, who were both established in 2007, have stood their ground in the so-called “streaming wars”, whereas some, like Quibi and CNN+, have faded completely or undergone newsbreaking rebrands like Max after the Discovery and WarnerMedia merger earlier this year.
Beyond influencing media consumption, streaming has revolutionized the entire industry. Entertainment powerhouses such as Disney, Warner Bros. and Paramount have had to restructure their strategies in an attempt to rival digital-first entities like Netflix, Apple and Amazon. Even further, the launch of ad-free and ad-supported streaming plans have created even more room for competition among services as consumers evaluate which platforms they’ll decide to keep as prices increase and ads become more frequent while streaming.
Navigating the Future of Advertising
In an age where CTV is reshaping media consumption, advertisers must evolve in tandem. Precise audience targeting, enriched viewer engagement, and data-driven insights are not just strategies — they are necessity. As CTV’s influence continues to surge, the brands that fully embrace its potential will lead the vanguard in the advertising revolution.
Nuno Andrade, chief innovation officer at Media Culture, is a digital media industry veteran whose experience spans more than 15 years. As Chief Innovation Officer at Media Culture, Nuno specializes in bridging linear and digital media efforts within the agency while being responsible for the formulation of internal and client strategy.
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