With impressions increasing nearly 60 per cent year over year, connected TV (CTV) advertising now accounts for nearly half of impressions served, according to the latest Video Benchmark Report from Extreme Reach (ER), the complete creative asset management solution for the ad industry. Based on Q1 2019 performance metrics from the company’s platform, AdBridge, and specifically its proprietary video ad server, the report highlights the massive impact of CTV on multiple aspects of digital advertising.
The CTV-driven transformation is accelerating in parallel with consumers’ shifting media consumption preferences. According to a report issued by Nielsen in March 2019, 68 per cent of US households had a connected TV device (e.g., Roku, Apple TV) by Q3 2018. At the same time, use of ad-supported streaming services like Hulu and a host of emerging entrants in the field is surging. And where the audience goes, ad dollars soon follow. While OTT advertising budgets are currently just 3 per cent of TV ad budgets, Magna Global predicts a 30-plus per cent growth rate for both 2019 and 2020.
CTV’s Gain is Mobile’s Loss
While the advertising conversation in Q1 2018 revolved around mobile and there was optimism about the adoption of 6-second video ads, Q1 2019 reflects a near-opposite paradigm. Mobile video ads, at just 25 per cent of all impressions, are at their lowest since Q1 2017 and 6-second ad impressions are negligible.
CTV impressions, on the other hand, are now 49 per cent of the total, or nearly double those of mobile. Because these ads are generally unskippable, they have an unprecedented 97 per cent completion rate.
The Rise of One- and Two-Minute Ads
As noted in prior benchmark reports, the growth of CTV and its unskippable ad inventory is driving a shift to longer ad lengths. In Q4 2018, 30-second ads first displaced 15-second spots as the most common ad length, and the growth trend has continued. 30-second ads accounted for 69 per cent of all ads in Q1 2019, a 20 per cent increase over the prior quarter.
While 30-second spots have a clear majority and 15-seconds are in second place, ER projects that ads of 60-seconds and longer will become more prevalent in the coming quarters. Still just 3 per cent of all ads, the quantity of 60-second ads increased nearly 5-fold from Q1 2018 to Q1 2019. 2-minute ads registered for the first time on the ER Benchmark radar in Q1 2019 at just 0.1 per cent of ads. With a growing, captive CTV audience, ER expects these longer ads to rise rapidly.
Premium Publishers Lead
The rise of CTV has reached critical mass for the sell side of the media-buying equation who can now capitalize on multi-channel content consumption and optimize the value of their highly-targeted, measurable audiences. CTV inventory is almost exclusively sold by premium publishers directly to agencies and advertisers and this has driven up the per centage of overall impressions served to premium publishers, along with video completion rates and an increase in longer ads as noted above. In Q1, 82 per cent of video impressions served by Extreme Reach ran on premium publisher sites and the video completion rates for those publishers hit a record high of 93 per cent, a year over year increase of 8 per cent from Q1 2018.
“The digital advertising ecosystem is undergoing a total disruption which is driven by the growth of non-linear TV formats. The upside is significant for nearly everyone,” stated Mary Vestewig, Senior Director, Video Account Management at Extreme Reach. “Publishers are able to maximise the value of their inventory which will bring the revenue needed to create more high-quality programming. Meanwhile, audiences have an unprecedented selection of entertainment options and with new capabilities for targeting they should get more personalized and relevant advertising.”