Thinkbox
You can’t move for CTV at the moment. Reports, forecasts, features, and events abound.
But what is CTV? The C nominally stands for connected, but it could equally stand for confusing.
Such is the confusion that Video Week recently ran an article asking industry professionals what they mean by the term CTV. It can often be used interchangeably with OTT (over the top, as in over the top of a broadcast platform such as Sky, Virgin or Freeview), streaming, and AVOD (advertiser-funded video on demand).
The fact Video Week had to ask hints that more clarity might be needed. And here at Thinkbox we’re being asked questions too.
So, to help, we’ve gathered together some of the main questions below. And, in the interest of being useful, we’ve also answered them.
An important caveat first: this is about CTV in the UK. TV (and CTV within it) in the US is a very different market from the UK.
What is CTV?
A CTV is a connected TV set – i.e. a TV set that is hooked to the internet either directly or via some hardware, like a set top box, streaming device, or games console. 80% of homes in the UK have at least one TV connected to the internet.
But when people talk about CTV, they usually don’t mean the hardware, they mean content – a TV set-based TV service (and by people here, we mean people who work in advertising; regular people don’t talk about CTV all that much, quite rightly).
Our hyper-connected cousins at the IAB define CTV as “video content consumed on a TV screen, delivered via an internet connection”.
So, in this definition, CTV as a form of content would include all the broadcasters’ VOD services, subscription VOD services like Netflix, and YouTube (but not when any of them are watched on, say, a mobile or laptop).
It also includes other advertiser-funded TV services on TV sets like Samsung TV Plus and Rakuten.
So it’s a broad church in a big tent to say the least. And it’s reasonable to question how useful lumping everything in under those three letters really is.
For example, the ‘TV’ in CTV does the heavy lifting in terms of understanding what it is, and one might assume it is all TV content – e.g. premium, brand safe content – which it isn’t if YouTube is included.
So Broadcaster VOD is CTV?
Yes. This is probably the question we get asked the most, in fact.
Because there’s a bit of hype about newer CTV players at the moment, it can obscure the fact that it’s been around for a fair while. You can’t watch ITV Hub, All4 or Sky on demand on your TV set without it being connected to the internet.
What is the CTV advertising opportunity in the UK?
Preliminary data from BARB provides some interesting insight into what TV set streaming viewing currently consists of in the UK. It is worth taking on board.
In February 2021, 62% of TV streaming was subscription VOD (so Netflix, Amazon Prime Video, Disney+ etc. and no advertising opportunity, with the exception of sport on Amazon Prime Video), 19% was broadcaster VOD (including BBC iPlayer), and the remaining 19% was YouTube.
Is YouTube watched on the TV set CTV?
This is one that’s up for debate. Our view is that advertisers shouldn’t class YouTube as TV. Some of it is TV (Sky Sports highlights and cutdown broadcaster shows, archive shows), but as YouTube operates outside the regulations of the OFCOM broadcasting act, is mainly UGC, and offers skippable ads, advertisers shouldn’t place it in the same bucket as TV.
What about other ad-funded CTV services?
Although the UK is an advanced market for CTV/streaming, BARB can find no measurable time spent with any non-broadcaster ad-funded services (sometimes called AVOD).
In the US, these AVOD services are more significant – services like NBCU-owned Peacock and Disney-owned Hulu. But the US is a very different marketplace, with a long history of local and national cable networks, so we should be wary of assuming what happens over there is true here. CTV is a good example of that.
Why all the hype then?
CTV is an emerging space – if a space can emerge. So, there’s lots of interest in it and lots of new players are vying for success within it. Combine this with the declining reach of linear broadcast TV and you have a topic that marketers will pay attention to, and something new entrants’ sales teams will exploit – hence the rash of CTV reports, which are not always that helpful (you can see our response to one of them here).
Their challenge, however, is getting people to watch their content. And when your competition is the BBC, ITV, Channel 4, Sky, Discovery, Viacom, Warner, Netflix, Disney+, Amazon Prime (we could go on), it’s a properly tough place to get traction. This is why the preliminary numbers from BARB show that there isn’t any measurable viewing to the new players (like Rakuten TV and Samsung TV Plus) in this space as yet.
So, beware the hype. This is not to say that services like TV Plus and Rakuten won’t grow in the UK in the future. But it is important to have a clear-eyed view of what the current state of play is.
Will CTV replace linear TV?
This question is a good example of why the CTV label and its broadness of definition can be unhelpful. Linear TV is increasingly watched on connected TV sets and will increasingly be delivered by the internet. So, linear viewing is often CTV viewing.
What does CTV advertising offer?
The best answer to this is to look at what broadcaster VOD offers, as that is the prime CTV advertising opportunity in the UK.
So that’s incremental reach to linear TV, especially for younger viewers; high quality audiences; first party data; incredibly high view through rates; a reputable, brand-safe, strictly regulated environment; and a host of advanced TV advertising opportunities, to name a few things.
For more on this, have a look at our recent overview of Advanced TV and everything it offers advertisers.