Why CTV Advertising Is a $28.5B Opportunity

Welcome back to Funnel Vision, the weekly newsletter that puts performance creative & growth marketing in focus. Brought to you by the crew at Ready Set.

Did you know that 99% of US households subscribe to at least one streaming service?

If you told that to Reed Hastings, founder of Netflix, he’d say, “What?? I can’t hear you from the top of the private ski resort that I own!”

One major recent shift in the streaming business model has opened a massive opportunity for advertisers.

In this issue of Funnel Vision, we break down why CTV is the hottest thing in digital advertising since the rise of social media.

Let’s get the vision.

Reading time: 7 minutes

CTV Advertising: How to Crack A $28.5B Opportunity

Here’s some more spicy stats for your Friday:

• 87% of US households have internet-connected TVs
• The number of cord-cutters (138M) has surpassed cable TV viewers (129M)
• The average time spent watching connected TVs is approaching two hours a day.

And if those figures didn’t catch your attention as a marketer, here’s one that will—CTV ad spend is projected to hit $28.5 billion by 2024, accounting for 9% of total digital media spend.

CTV is the fastest growing ad channel in the US and the biggest opportunity in digital advertising. Here's why, and how you can get in on the action.

First, what exactly is CTV?

Connected television, or CTV, is any television that streams digital content via the internet.

The content streamed on those devices is provided by streaming platforms like Netflix, Apple TV+, and Hulu. As you (or your credit card statement) may have noticed, the number of these streamers has boomed in recent years—more on this below.

CTV advertising, therefore, is the act of placing ads to be viewed by audiences on these devices.

Why CTV is a Game-Changer

“CTV combines the broad reach of traditional TV with the precision and measurability of digital advertising,” explains Susan Kirksey, VP of Strategy & Client Success at Ready Set.

“Because many CTV ads are non-skippable, engagement rates are some of the highest in digital advertising; video completion rates can be upwards of 95%.”?

So, we have:

• A precision + reach one-two punch; and
• A highly-engaged ad channel that’s 4X’d in 5 years

That alone would usually be enough for a knockout combo. But there’s one more factor that makes CTV even more explosive…

The ad-supported streaming boom

Until recently, the value prop for Netflix (and other streamers) was simple:

Pay a monthly subscription and get premium TV shows and movies, on demand, without the ads.

When Netflix was the only kid on the playground, it was an easy sell. Except now the playground’s getting crowded. Apple TV+, Amazon Prime Video, Disney+, Hulu, *checks credit card statement, takes a breath*, Peacock, Paramount+, Max... the list goes on.

All of these brands are fighting over consumers who’ve reached an inflection point with the number of streaming services they’re willing to pay for.

Enter: ad-supported streaming.

In a masterstroke from the streamers, in one move they retained price-conscious consumers AND diversified their revenue streams.

??Netflix's cheaper $6.99/month ad-supported tier, launched in 2022, has been a smash-hit. There are 40 million monthly active users subscribed.

For advertisers, this presents a massive opportunity. We count five major benefits.

5 reasons to bet on CTV

#1 – Reach cord-shavers, cord-cutters, and cord-nevers.?

No, they don’t have anything against string. These are viewers who fall into one of three categories:

?? Cord-shavers: People with a combo of traditional TV and streaming services

?? Cord-cutters: Those who've ditched cable TV in favor of streaming

?? Cord-nevers: The streaming-only crowd who've never subscribed to regular TV

#2 – Some of the highest engagement rates in digital advertising.

As mentioned above, CTV ads boast video completion rates of up to 95% . Compared to YouTube ads with an average of 20-40% and social media ads which typically average below 30%, CTV stands head and shoulders above the others for engagement.

#3 – Advertise in a premium, brand-safe environment.

Your ads appear alongside high-quality content (unless you're watching Love is Blind) which enhances brand perception and trust.?

Imagine your ad running during a popular series on Hulu—that's the kind of brand association money can't buy (except it can, through CTV advertising).

#4 – Advanced targeting capabilities.

Demand-Side Platforms (DSPs) like Basis and Vibe make it possible to create specific audiences that use both first- and third-party data to get your ads in front of the right people.?

#5 – Measurable results.

While attribution can be challenging (more on that later), CTV offers more measurable outcomes than traditional TV advertising. In this brave new world of marketing where everything is expected to be trackable and ROI-able, this is music to budget-conscious CMO’s ears.

There are challenges with CTV

It’s not all sunshine, lollipops, rainbows, etc.

Like any growing channel, there are growing pains. Here’s Susan again:

"Fragmentation across platforms and devices can make it hard to manage campaigns and track results comprehensively. Also, accurate attribution and frequency capping across CTV and other channels still have room for improvement."

We all know someone using their brother’s girlfriend’s parent’s Netflix password. (Shout out to my in-laws who, knowingly, support our Netflix viewing.)

That’s the fragmentation challenge with CTV. It’s tough for advertisers to know who exactly is watching.

Attribution is also a complex issue.?

As Adam Lovallo explained in a recent Screen Share session , many CTV platforms rely on IP matching for attribution which can lead to inaccurate results.

Incrementality testing and programmatic CTV are working to address this.

Also, CTV isn’t for every brand.

Let's be real: CTV isn't for every brand... yet.

CTV requires a significant investment to see meaningful results. Industry experts suggest that brands spending at least $500,000/month on digital channels see the best results, as they have the budget to properly test and optimize CTV campaigns.

Your CTV action plan

If you are ready to dip your toes into the dynamic world of CTV, here’s how to get started.

?? Ensure you have budget & infrastructure to support CTV campaigns.

? Set clear goals. Define what success looks, whether you’re going for brand awareness or direct response, and the appropriate KPIs to optimize for.

?? Partner with platforms or agencies with experience in CTV advertising, a track record of success, and who can integrate with your existing strategies and goals.

?? Develop a measurement and reporting strategy to track and communicate impact.

?? Create compelling content. CTV is a visual medium, so invest in high-quality creative that hooks viewers quickly, adheres to standard 15–30 second slots, and is optimized for larger screens.

Tap into CTV with Ready Set

Here at Ready Set, we specialize in helping brands navigate the complexities of CTV advertising.

How? Glad you asked. Three things:

1. Our team of creative strategists have the pulse on what performs and the expertise to craft a winning strategy for your brand
2. Full in-house production capabilities bring that strategy to life with high-quality, professionally shot and acted, ready-to-run creative
3. Our media buyers are scary smart—certified CTV experts, they know exactly how to run effective campaigns

Want to learn more about how Ready Set can help you crack the CTV code? Let’s chat .

The future of TV advertising is connected. Are you ready to plug in?

Meta’s constant updates hurting your brain? We’ve got the cure ??

Our next Screen Share session, the State of Meta: How Recent Platform Updates Impact Performance , is TOMORROW!

DTC guru Cody Plofker (CMO, Jones Road Beauty) is joining us to demystify the latest updates and releases to Meta’s Ads Manager.

You’ll walk away from this power hour knowing:

• ?? Which new Meta tools actually matter (and which to ignore)
• ?? Outdated practices to ditch ASAP
• ?? How to master Meta's AI tools for killer ads

Plus, you’ll get the opportunity to have your burning questions answered, LIVE.

It’s happening tomorrow, Wednesday, September 25 at 3:00pm ET/12:00pm PT.

Space is limited and slots are filling fast. Don’t miss out!

I WANT IN – SIGN ME UP!

AD OF THE WEEK ?

This was our #1 most successful creative this week. Let’s break it down.

It’s from sustainable seafood delivery brand, Wild Alaska Company.

Here’s why it works:

?? The opening shot of fish in a grocery store is familiar and instantly grabs attention.?

?? Super only shows half the sentence, leaving the audience hanging. Many Americans mistakenly think… WHAT???

?? Striking visual contrast between grocery store vs. Wild Alaska fish demonstrates the superiority of the product.

??? The story of the ad is told from the founder’s perspective, adding a grounding authentic touch.

This ad works because it directly addresses a common pain point (subpar grocery store fish) and offers a compelling solution (high-quality, sustainably-sourced seafood delivered to your door).?

Takeaways:

1. Before and after is a compelling storytelling device that naturally positions your offering as the better choice.
2. There were 12 variations of this ad, which itself is a variation of a previous ad. Test, test, test till you have the winner.
3. Leave ‘em hanging. No one can resist a cliffhanger.

?? Shout out to Ready Set’s Kat Spargalo and Javier Pereyra for their inspired work on this hit ad!

Till next time!

Have a great weekend, folks. As always, thanks for reading!

Dan Moran , Content Marketing Manger, Ready Set | Sleepless | Airpost

Psst... wanna earn $1k?

Know someone looking for efficiency, flexibility, and scale with performance creative and media buying? Refer brands in your network and earn $1,000.

Check out the Ready Set referral program here.