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Why Video Advertising Matters More Than Ever in 2022

Why Video Advertising Matters More Than Ever in 2022

Written by enCOMPASS Agency

Over the past couple of years, we’ve seen some noteworthy shifts in how people consume information and entertainment. One of the biggest beneficiaries of these shifts is connected TV, or CTV. Whether it’s attributable to the pandemic or to technological changes that were already in progress, more and more consumers are turning to CTV for entertainment, making it one of the fastest-growing trends in digital advertising.

But if CTV is gaining in significance, the opposite holds true for traditional TV. In fact, last year saw advertisers decreasing their emphasis on linear TV, a natural response to cord-cutting and to the widespread shift toward CTV.

The bottom line? CTV is an avenue that advertisers cannot ignore. It should be considered paramount to any marketing strategy as we head deeper into 2022.

What is CTV?

To begin with, it’s important to be clear in our terms. When we talk about CTV, exactly what are we talking about?

Essentially, CTV refers to any device that can be either attached to, or embedded in, your TV, allowing you to stream video content. There are many well-known and widely popular examples. Think Roku, Amazon Fire, and Apple TV. Gaming consoles like the Xbox and PlayStation also qualify.

Thanks to the rising popularity in CTV, more and more households have cut out their cable subscriptions and essentially stopped watching locally available channels, shifting instead toward streaming services and video on demand (VOD). As you can imagine, this shift in consumer behavior has not gone unnoticed by advertisers, who have rightly hailed CTV as a critical channel for reaching their target audiences.

What Does the Data Show About CTV?

For evidence of this, there is plenty of data that demonstrates CTV’s rise in prominence, at the expense of linear or traditional TV.

For example, before the pandemic, it was projected that about 208 million people were streaming content through CTV devices. As of 2021, the number has risen to almost 215 million. While this may not seem like shocking growth, it’s nevertheless a significant development, furthering a trend that stretches back several years.

And as the data shows CTV steadily rising, it also shows linear TV access in decline. As of 2021, there are just over 74 million traditional pay TV households remaining in the United States.

What is Programmatic Ad Buying?

It’s also important to note that in 2021, CTV advertising rose at rates that were among the fastest of any sector in the digital ads market.

One reason for the increase in CTV advertising is that it allows for programmatic ad buying. Programmatic advertising refers to the use of automation technology for media buying, as opposed to more conventional methods of digital advertising.

Basically, with a programmatic ad campaign, algorithms are used to analyze user data, then to serve ad content to just the right person at just the right time (and, crucially, for just the right price).

There are a number of benefits to the programmatic method. In addition to being flexible and scalable, the data-driven nature of programmatic ad buying makes it easier to target the exact audiences for whom the ad is intended. This focused targeting means that the ad spend is used more efficiently; in other words, you pay only to show ads to the right people, as opposed to paying to show your ad to a more general audience. And, because programmatic advertising uses real-time data, it’s easy to pivot or adapt your strategy as needed.

So, what’s the connection between CTV and programmatic? Simply put, the increased consumption of CTV has made a huge inventory of programmatic media available. There are more opportunities than ever before for advertisers to connect with their target audience via programmatic ads, which is why CTV is so vital to your marketing efforts going forward. Crucially, though, you’ll need a sound strategy in place to ensure CTV advertising success.

Develop a Video Strategy for 2022

As you seek a comprehensive strategy, we invite you to talk with one of the consultants here at enCOMPASS Agency. Our team has long championed the value of programmatic ad buying, and we’ve been ahead of the curve by encouraging our clients to shift a percentage of their video advertising budget to CTV for years now. We have a proven track record of success in this channel, doing great work that makes a real difference for our clients.

Specifically, our team has ample experience providing clients with video strategies that are well-integrated with their other marketing efforts. We can assist with video development and production, and also advise on the best ways to use a video marketing budget for maximum impact.

Do you have questions about CTV, or about using programmatic advertising more generally? We’d love to talk with you about some specific strategies. Contact the team at enCOMPASS Agency whenever you’re ready for a consultation.