Connected TV: The new frontier of digital advertising

Connected TV (‘CTV’) is one of the fastest growing major ad formats and has been a catalyst for brands viewing TV as an effective digital marketing channel again. Over the past decade as consumer habits have moved towards watching more content on streaming platforms there has also been an evolution of advertising from mainstream linear to targeted programmatic ads. TV is no longer seen as a mass audience play as CTV advertising allows brands to create an improved consumer engagement with measurable results and more often than not, higher ROI.

Online and connected TV advertising revenues worldwide

Source: Statista

Brands are now able to utilise the first party data collected on consumers to serve personalised and more engaging ads either as short or long form content. Technologies such as Samba TV and VideoAmp mean that connected TV marketers can measure campaign effectiveness (in a similar way to conventional performance marketing) by tracking the cost-per-completed-view, video completion rate, clicks, conversions, and direct responses. In a world where attention spans are impressively low (less than 10 seconds), CTV’s ability to deliver personalised ad experiences at a higher ROI means it is becoming an essential component of advertising spend and media plans.

As with all nascent marketing channels, challenges have surfaced around areas like ad fraud, the transparent and precise nature of audience data, the fragmented market for high quality inventory and complexities in campaign measurement. The industry is constantly pivoting and evolving in an attempt to resolve these issues either through internal development or looking to M&A as a solution.

Landmark deals like Microsoft’s acquisition of Xander, Bridgepoint’s investment into MiQ, AppLovin acquiring TheViewPoint, Magnite’s acquisition of SpotX and ironSource’s merger with Unity Software demonstrate the prominence of CTV in today’s M&A market. We expect further M&A and fundraising activity as we look forward into the next few years either from larger corporates to gain CTV capability or to solve for some of the challenges highlighted above.

With an ever growing end audience and market changes like the streaming platforms introducing cheaper ad-supported subscriptions, CTV advertising is a trend that is here to stay. We expect the remainder of 2023 to be a big year for CTV as brands continue to take advantage of this growing channel.

WY Partners offers specialist M&A and fundraising advice to businesses who are seeking to either buy, sell or raise investment in media and technology.

Please contact Alastair Greenfield at agreenfield@wypartners.com if you have any questions or wish to discuss this article further.