You would have to be living under a rock to not be aware of how social media platforms have dominated conversations all around the world. Nearly 75% of the world’s population over the age of 13 use social media regularly and over 93 percent of regular internet users log into social media every day. Seventy-two percent of Americans use social media. Advertisers have discovered where consumers are having conversations and are spending $134 billion this year to make a connection with potential customers. Seventy-five percent of Gen Zers and 48 percent of millennials report that they use social media to make a purchasing decision. As dramatic as these numbers are, there is about to be a new champion venue in digital marketing.
A recent study is revealing the open internet is capturing three times more attention from consumers than all social media platforms combined. The open internet, digital audio, the web, Connected TV (CTV), and gaming are attracting 76 percent of internet users as opposed to 24 percent of those utilizing platforms like Facebook, Snapchat, TikTok, Twitter, and others. Of the $189 billion spent on digital advertising last year, social media platforms captured nearly $58 billion of the total. According to Jeff Roach, chief strategy officer at SCS Agency, social platforms have been able to command such a high percentage of ad spend because they have heavily invested in audience targeting toolsets, analytics, and reporting.
“But all of that is starting to change given the rise of CTV,” says Roach. “The ability to bring TV advertising through both major streaming platforms like Hulu and Paramount+, alongside the long tail of the hundreds of OTT and CTV apps, suddenly makes programmatic buying at the top of marketers’ interests.” Connected TV ads are personalized advertisements that can be delivered over digitally connected TV devices. Unlike traditional TV ads that require the marketer to purchase a particular time slot, CTV ads provide a means of driving immediate sales and embedding targeted advertising into user interfaces. CTV ads can be more targeted and less expensive than traditional TV advertising.
Over-the-top advertising (OTT) is advertising that can be provided directly from the internet and streamed to any device with a screen such as smart TVs, set-top boxes, and game consoles. OTT providers like Netflix, Hulu, and mass media networks like Disney are launching OTT services. This year, 92 percent of U.S. households were reachable by CTV programmatic advertising, representing more than 110 million viewers. The opportunity to generate additional internet advertising revenue is staggering for the suffering linear TV advertising marketplace.
Networks are also moving to shift attention to the digital ad space by investing in ad-supported video-on-demand (AVOD) services. Streaming platforms like Disney+ and Netflix are initiating increased efforts into the AVOD space, which is currently dominated by Hulu.