How connected TV contributes to growth of online video advertising

Connected TV is fast becoming popular with consumers and also a viable platform for digital video advertising.

Posted on Aug 15, 2014 by YuMe

Streaming video content is becoming popular among consumers. At one point, television was the only way to watch video programming but now people can watch their favorite TV shows, sporting events or even movies using a computer or mobile devices such as tablets and smartphones. This increased consumption of video using non-traditional means has created an avenue for brands to take advantage of when it comes to digital video advertising.

According to data from eMarketer and cited in our company's white paper, "Video Ad Monetization Strategy for Tablets, Smartphones and Connected TVs," the market value for online video advertising will be $6.39 billion this year. However, by 2016, that figure is expected to jump to $9.3 billion, the equivalent of 15 percent of the total spend in the U.S. to advertise online.

Much of this growth can be attributed to consumers continuing to use multiple devices for viewing video content. Brands understand the need to create video marketing strategies around these platforms. The primary reason for this strategy is so companies don't miss out on any opportunities to advertise goods and services to both new and potential customers by effectively leveraging video ads to sway their buying decisions and maximize the generation of sales revenue. 

Given the number of platforms available that brands can use to launch a video ad, connected TV is one that is gaining a lot of traction with consumers. The ability to use a separate device that connects to a television and can stream video content are appearing in the homes of many people who may not even be conscious of this growing trend. However, because of the rapid adoption of advanced video game consoles like the Xbox 1 or PS4, and other devices such as the Apple TV, Roku, the new Amazon Fire TV unit and standalone smart TVs themselves, the connected TV ad network is one that is growing stronger.

The benefits of using connected TV for video advertising
Results from a consumer survey conducted by our company and used to create our infographic, "Why Advertise on a Connected TV: Emerging Growth Opportunities for Connected TV and Advertisers," 50 percent of those participating in our study revealed that they paired their televisions with the Internet. However, in news that is extremely promising for brands, 54 percent of respondents with connected TV devices stated they enjoyed viewing free content that is supported by the use of video ads.

Additionally, 34 percent of participants stated they expected advertisements to be a part of the content that can be seen on a connected TV device. For brands looking to incorporate this platform into their video marketing strategies, this is good news considering consumers have a reasonable expectation that ads will be a part of the connected TV viewing experience.

It is for this reason that companies should begin the creation and deployment of compelling campaigns that are stimulating from a visual perspective and contain strong messaging that resonates with viewers of these devices. As more people continue to adopt tools that have the capability to stream video content, digital video advertising will become a must for every company.

Over the next four years, spending to advertise on television is expected to reach $7.2 billion. That figure pales in comparison to online advertising which is predicted to top out at $22.5 billion in the same span of time. Video ads will contribute greatly to the increased spending to advertise on the Internet and brands must be prepared to have campaigns that can be displayed across a wide range of consumer devices.