Connected TV is booming in 2024. Viewership is high, advertising opportunities are increasing, and new tech is rolling out to bring the viewer closer to purchase.

This year, we have seen a wave of innovation, with trends like shoppable ads, co-viewing measurement, and ad-supported tiers taking center stage.

Here, we dive into four trends shaping the CTV landscape in 2024.

As FAST channels reach mainstream status, new shifts emerge

FAST channels have rapidly become the popular alternative to traditional cable and subscription-based streaming services in the past few years. FAST platforms like Tubi, The Roku Channel, and Pluto TV offer viewers a variety of content, from classic TV shows and movies to niche programming, without needing a paid subscription. The business model relies on advertising revenue, similar to traditional broadcast television, allowing viewers to access content for free. This approach has attracted a diverse audience looking for cost-effective entertainment options, particularly in a market where subscription fatigue is becoming more common due to the proliferation of paid streaming services.

As the sector matures, FAST channel platforms are experiencing shifts in consumer preferences and new entrants to the scene. Here’s a snapshot of how FAST is evolving:

• Growth rate slows, but unique offerings tick up: The growth rate of FAST channels in the U.S. is slowing, but there are still 1,943 unique offerings. This represents a 13% increase from May 2023 and a 47% increase from May 2022, according to Deadline.
• Major players are going FAST: Major media companies like Warner Bros. Discovery have entered the FAST market, but do not have the most widely distributed channels.
• The content is shifting: General entertainment remains the largest category with 1,092 channels. Over the past five years, there has been a shift in content availability. Initially, services struggled to acquire content, but now they can be selective about which channels they include. Movie channels are increasingly popular, growing 50% year-over-year to reach 236 channels.

Ad-supported tiers provide streamers with subscriber growth

With major players like Netflix and Disney+ launching ad-supported tiers, alongside existing platforms like Hulu and Peacock, the landscape of CTV has experienced a noticeable shift towards ad-supported models. This trend is driven by consumer demand for more affordable viewing options amidst rising subscription costs and economic uncertainties.

According to Antenna, a recent estimate suggests at least 93 million subscriptions to ad-supported streaming services in the US at the end of 2023. This figure is expected to have grown significantly. Industry experts believe the number has jumped to at least 170 million, fueled by factors like Amazon’s switch to an ad-supported tier and the increasing popularity of ad options across other streaming services.

Data from the first quarter of 2024 shows a clear trend: over half (56%) of new streaming subscribers opted for the cheaper ad-supported tier. This is a significant increase from 39% a year earlier.

When early streaming pioneers like Netflix set out to disrupt the cable TV model as we knew it, it seemed that subscription services would close many advertising avenues, but in 2024, they’ve all come full circle to the very thing they were trying to replace.

Platforms are rolling out their shoppable TV integration

The increasing integration of shoppable TV features, where viewers can purchase products directly from their screens while watching content, is another major trend gaining steam. This interactive experience transforms how consumers interact with ads in this space, blending entertainment with e-commerce. Platforms are enhancing user experience and continue to shorten that path to purchase gap. Each platform has its own methods for rolling out premium ad units, such as pause ads, QR codes, and 24-hour takeovers.

At this year’s upfronts, virtually every streamer featured the tech they were rolling out with this year. This is all to say, if you haven’t seen a shoppable ad on your favorite platform, it is coming. While fears of your favorite shows turning into QVC may be overblown, expect more actionable ads to pop up in more places.

CTV measurement is heating up in more ways than one

Measurement will always be a hot topic as long as we keep employing new technology, and CTV is no exception. In fact, there are so many advancements in CTV measurement, we couldn’t just settle on one.

Co-viewing is emerging

Co-viewing in CTV measurement refers to accounting for the fact that multiple people might be watching a screen together. Traditionally, CTV impressions were measured on a one-to-one basis, similar to digital ad impressions. This meant that an ad served on a connected TV counted as one impression regardless of how many people saw it.

This data is collected through various methods, including surveys, set-top box data, and smart TV analytics. Surveys often directly inquire about viewing habits and who watches specific programs together. Set-top boxes and smart TVs can track which devices are tuned to the same content simultaneously, providing insights into co-viewing behaviors. Additionally, some platforms utilize algorithms to infer co-viewing based on viewing patterns and device proximity.

For publishers, co-viewing presents an opportunity to extract more value from their inventory. By recognizing that an ad impression on a CTV device might reach multiple viewers, publishers can justify higher ad rates. This approach is similar to traditional linear TV measurement, where ratings account for household viewership rather than individual impressions.

While it presents opportunities for publishers to increase the value of their inventory, it also introduces complexities in terms of measurement accuracy and industry adoption. As the technology evolves and more players integrate co-viewing metrics, it will be crucial for the industry to find a balance that benefits both advertisers and publishers.

ID-based targeting is gaining traction

There’s a shift towards ID-based targeting using identifiers like IFAs (Identifier for Advertisers), which are gaining more traction. ID-based targeting refers to the use of unique identifiers to track and target users across devices and platforms. In the context of CTV, this typically involves identifiers like IFA on devices such as smart TVs, streaming devices, and gaming consoles. These identifiers allow advertisers to deliver personalized ads, measure ad performance, and retarget users across different devices.

While not unique to an individual device, IP addresses are still valuable for identifying households and delivering targeted ads. However, they are increasingly viewed as supplementary signals due to privacy concerns and limitations in precision.

With increasing concerns around privacy and data security, there is a stronger emphasis on ensuring that ID-based targeting complies with regulations like the GDPR and CCPA. Advertisers and platforms are adopting privacy-first approaches, such as anonymizing data and obtaining explicit user consent for tracking.

Content signals are becoming more available

Advertisers are increasingly demanding more transparency from publishers regarding the content in which their ads are placed. This demand is driven by the need for better targeting, optimization, and brand safety.

While some publishers have been reluctant to share detailed content signals due to fears of selective buying and potential revenue loss, there is a growing trend towards greater transparency. Publishers are beginning to recognize the value of providing content signals to attract premium advertisers by gradually offering more insights, such as genre, ad position, duration, and type of content (e.g., live sports) to meet the needs of advertisers.

Looking ahead, we can expect to see continued growth in the adoption of CTV, with viewers increasingly opting for chord-cutting and ad-supported models. The technology is moving at such a blistering pace, that looking ahead in six months might mean monumental changes to some of the trends listed here.

To learn more about how you can improve your ad buying and placement strategy, contact us.