How agencies can capitalise on the CTV trend

Contextual advertising is now becoming essential, argues Rakuten Advertising's James Collins

More people are moving away from traditional TV towards Connected TV (CTV). Research from Rakuten Advertising found that, globally, 41% of viewers prefer to stream content rather than watch it over traditional platforms. What’s more, as consumers tighten budgets amidst the rising cost of living, more subscription-based CTV providers are considering ad-supported content and revenue models. Netflix, for instance, is set to rollout a cheaper, ad-supported subscription tier in the not-so-distant future — demonstrating the growing opportunity for advertisers on streaming services.

Boosting recall with context

Not only is there an opportunity to reach a growing streaming audience, but also to tap into the benefits of contextual advertising on CTV. 42% of viewers, according to Rakuten Advertising, find adverts on CTV to be more relevant to the content they’re watching; nearly the same percentage (41%) said the adverts they see match the mood they’re in while streaming.

This isn’t to say that CTV will replace traditional TV strategies — far from it. Broadcasting is a successful strategy, offering wide exposure that enables advertisers to drive recall. The time is now, however, to supplement broadcasting with contextual advertising, using CTV to target viewers at a more focused level. The data shows that the added context provided by CTV boosts recall — with 60% of viewers stating they can correctly identify an ad 24-hours after seeing it on a streaming service. A combination of these two strategies is the most effective way of reaching new audiences.

Adding resonance to recall

TV advertising is not perfect. Sometimes, ads just don’t land, and that margin for error is still there when using contextual advertising. The difference is that marketers can increase the chance of resonance on CTV platforms by placing their messages alongside content where viewers are likely to be more receptive. Advertisers should ask themselves, firstly, “who does my message resonate with the most”, and, from here, estimate where this audience is most likely to be.

In this way, CTV can provide an opportunity for advertisers to enhance the impact of their TV spend and make it more likely that audiences see an ad when they’re in the right mood. Viewers can choose what they want to watch and when, selecting the content that aligns with their current prevailing emotions. Clever advertisers will be able to capitalise on this by carefully choosing where their ads are placed, which can pay dividends by reaching consumers in the right mindset.

Driving the third “R” — returns

Recall plus resonance improves the impact of advertising, but the final hurdle is driving commercial returns. In every market, the majority of CTV viewers (71% globally) agree that they purchase, or occasionally purchase, items they’ve searched for after seeing them advertised on a streaming service. Thus, by making their audience’s mindset a key consideration when deciding where to place inventory on CTV, agencies can allocate this inventory more efficiently and drive commercial returns.

This link between the three “Rs” – recall, resonance and returns — makes CTV inventory an essential component of modern media planning. Contextual advertising, in this way, is the perfect supplement to traditional, broadcast advertising inventory. This combination is the most effective way of driving brand awareness, while reaching audiences that are more likely to remember and buy into the brand.

James Collins

As Rakuten Advertising’s Senior Vice President, Media Network, James Collins works with a global team that is responsible for developing Rakuten Advertising's media offering - bringing together Rakuten’s unique audiences and maximising the value that Agencies and Brands can achieve by reaching them.James has championed the use of data in the digital sector over the last decade. Focusing on delivering actionable insights from advertisers’ marketing data, he is passionate about empowering businesses to use data to better understand their customers, make more effective marketing decisions, and ultimately improve the customer experience.

All articles