As we cruise toward 2025, the world of Connected TV (CTV) is evolving faster than your cousin’s Instagram feed after a few too many cocktails.
Get ready for a digital playground where advertisers have more targeting tools than a TikTok influencer has filters. From ad-supported streaming platforms to shoppable ads, here’s what’s shaking up the CTV scene and why advertisers can’t afford to miss the boat (or should we say stream?).
Before we dive in - big thanks to our friends at ADOTAT for helping with the research - always a pleasure to collaborate with the best in the biz.
Ad-Supported Streaming: The New Normal (Who Needs Cable?)
Cable TV? So last century. Enter the age of ad-supported streaming, where shows are free (well, kind of) but with a side of ads. And guess what? Consumers actually like it. Who knew?
According to a report prepared in partnership with The Harris Poll, which surveyed 2,503 adults who stream at least one hour per week, streaming habits in 2024 show that Americans are diving into streaming like never before. In fact, 56% of viewers surveyed stream for 1-3 hours in a sitting, with 40% bingeing more than three hours at a time. Americans are watching more TV, spending more on subscriptions, and embracing ads for the privilege of saving a few bucks.
Consumers are now spending an average of $120 per month on streaming services and TV packages, which is more than what they typically spend on gas ($112 per month). And guess what? More than half of Gen Z and Millennials think they’re overspending on streaming, and 71% of them have canceled memberships due to price hikes or tiered membership plans.
For advertisers, this means a massive shift toward ad-supported content, where consumers are much more willing to accept ads in exchange for saving a few bucks. In fact, 58% of respondents said they’d be willing to watch ads if it meant saving the cost of an extra coffee per month, and 62% of respondents prefer free, ad-supported streaming over a paid subscription.
And the major streaming platforms are taking notice. Disney+ has 19 million ad-supported subscribers, Hulu boasts 37 million, Netflix has 12 million paying customers who now have ads, and even Peacock comes in strong with 40 million ad-supported users. The future of TV is ad-supported, and advertisers are positioning themselves to take full advantage of this growing trend.
Enhanced Targeting Capabilities: Advertisers Are Getting Creepy (In a Good Way)
Let’s get real - targeting in the CTV space is a goldmine for advertisers. It’s like having a backstage pass to every viewer’s preferences, behaviors, and even location. With the digital capabilities of CTV, advertisers are now able to pinpoint viewers based on precise geographic locations, ensuring that the right ad hits the right person at the right time.
No more broad brushstrokes. We're talking about hyper-local targeting, where ads can be served to viewers within specific zip codes or even by specific IP addresses.
This is especially valuable for advertisers with multiple locations, like car dealerships or retail chains, where they can send customized ads to consumers based on proximity. An auto dealership with three locations, for example, can send relevant ads to viewers closest to each branch.
As Adam Helfgott, CEO of Madhive, explains, there’s an increasing demand for advertisers to target hyper-local audiences efficiently at a national scale. This is particularly useful for political campaigns, where specific voter groups in battleground districts can be targeted with ads that speak directly to their concerns. For example, hotly contested districts in New Hampshire’s Congressional District 01 and Pennsylvania Congressional District 07 saw more political ad impressions in 2022 than others across the country.
And with Automatic Content Recognition (ACR) technology, advertisers are gaining valuable second-by-second data on video completion rates, allowing them to track how well ads are performing and adjust in real time. If viewers are watching an ad to completion, it’s a sign that the targeting and messaging are spot on. And if not? It’s time to tweak the strategy. With CTV, advertisers can now measure their impact with surgical precision.
Shoppable Ads: Watch, Buy, Repeat
Shoppable ads are changing the game, turning TV into a retail platform. Want to buy that trendy pair of sneakers you just saw in an ad? No need to open a new tab or grab your phone. Just click, buy, and boom - you’re done.
CTV's integration of shoppable ads is growing at a remarkable pace. According to eMarketer, shoppable TV is projected to see 108.7 million shoppable media buyers by 2027. And the numbers don’t lie - 50.8% of consumers have already spent between $100 and $499 on TV-inspired purchases, with 40.3% planning to spend even more in the next year. With the surge in mobile device usage, nearly 62.7% of consumers say they find new products or brands through TV content. And more importantly, 67.5% prefer starting their product searches via a search engine - meaning shoppable TV ads are pushing consumers to take immediate action.
Platforms like Roku, Amazon Fire TV, and Tubi are incorporating shoppable video, creating a seamless path from entertainment to purchase. It's not just about product discovery anymore - CTV is becoming a vital tool in the direct path to purchase. In fact, 57% of ad agency professionals see shoppable video as the next frontier in retail media, as TV moves beyond brand awareness and into the realm of real-time consumer purchases.
CTV’s shift into shoppable media means that advertisers aren’t just creating awareness - they’re fueling direct action. With consumers now more willing than ever to make purchases while watching their favorite shows, this is a massive opportunity to connect with high-intent audiences and drive sales.
The FAST Revolution: Free TV Is Back (Kind Of)
Let’s not forget Free Ad-Supported Streaming TV (FAST) services like Roku Channel and Tubi. For the bargain hunter in all of us, these platforms are gold. Free content, with a few ads thrown in for good measure, is winning over audiences faster than you can say “free trials.” Ads are now showing up on these services in a big way, and advertisers are jumping in with both feet.
In 2024, the FAST market is expected to reach $9.62 billion in revenue and grow to $16.14 billion by 2029. With 66% of TV viewers in the U.S. using FAST platforms in a typical month, services like Roku, Tubi, and Pluto TV are now reaching millions of viewers every month. The Roku Channel alone will reach 83.4 million viewers in 2024, with Tubi not far behind at 75 million.
FAST services are particularly appealing because they offer a wide variety of free content, and viewers are willing to trade a few ads for convenience and access. In fact, 53% of FAST users report they’ve cut back on paid streaming services, preferring the free option. But the power of FAST extends beyond the US - Europe, Asia-Pacific, and Latin America, FAST services are expanding rapidly, as audiences across the globe demand free and convenient entertainment.
In 2024, the FAST market will likely generate more revenue than many traditional cable networks, and by 2029, it’s expected to surpass even major streaming platforms. As consumers flock to these platforms, advertisers will find an increasingly powerful way to reach large, engaged audiences without relying on expensive subscription models.
Programmatic Advertising: The Automation Revolution (But Hold Your Horses)
In the world of CTV, programmatic advertising is the equivalent of having a robot do your job. It’s quick, it’s automated, and it lets you buy ads in real-time. Sounds like a dream, right? But like all good things, it’s got some kinks.
While it’s growing (hello, efficiency), programmatic still has a reputation for being a bit of a mystery tour for advertisers. The transparency problems, convoluted supply chains, and all-around chaos that come with navigating it? Not so dreamy. Still, programmatic’s here to stay, and for advertisers looking to target with precision, it’s like the Swiss Army knife of ad buying.
For CTV advertisers, using a demand-side platform (DSP) can greatly simplify the process, allowing for mid-flight optimization. Unlike traditional TV, where ads are locked in far in advance, CTV ads can be optimized in real-time based on performance data. This flexibility allows advertisers to make adjustments as a campaign unfolds, ensuring their ad dollars are spent as efficiently as possible.
But to make it work, programmatic buyers need to embrace the full potential of targeting, optimizing campaigns on the fly, and ensuring high-quality placements. By leveraging tools like Peer39’s content categorization, advertisers can ensure their ads appear in premium, relevant environments, maximizing effectiveness and ROI. In-flight optimization is the key to making programmatic work for CTV, and the brands that master it will see significant rewards.
The Big Takeaway: It’s All About Precision, Baby
So, what’s the bottom line? CTV is becoming the Swiss watch of advertising - precise, data-driven, and smart. From ad-supported streaming to shoppable ads, advertisers now have the tools to reach their audience in ways they never could before. Add in the rising popularity of FAST services and the growing shift toward programmatic, and it’s clear that 2025 is going to be a wild ride for the advertising world.
At Origin, we’re ready to make sure you don’t miss out on these trends. Whether you’re targeting with laser focus or shopping your way through ads, we’ve got you covered. And if you think ads on your TV are just a nuisance, well, buckle up. They’re about to become your new best friend.
Summed up in under a sentence: 2025 is looking good.
Origin is an award-winning Creative Technology company whose zero code CTV ad formats enable marketers to deliver dynamic and responsive ad experiences in the living room and outside the home.
With unparalleled creative capabilities and proprietary ad serving technology, Origin’s off-the-shelf and custom solutions are trusted by agencies, brands, creative teams and programmatic platforms who want the ads they run to get the attention, engagement and outcomes they deserve.
Founded by media veterans Stephen Strong and Fred Godfrey, Origin is driven by the belief that to win a viewer today, we must look beyond how it was done yesterday.
Learn more at: originmedia.tv
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