From the MNTN Slack — Video Ad Channels Should Be Friends

8 Min Read

Connected TV advertising is about to break a new record high, but do advertisers really have to pick sides in the social vs. CTV debate? How is second-screen behavior affecting the ad experience? And what do the big shake-ups at Disney+ and Hulu mean for everyone? This week, our team discussed these latest news updates in the MNTN Slack newsroom.

Stephen Graveman (Content Marketing Manager): Hey, here’s an interesting story going around this week: a new forecast by Advertiser Perceptions projects that CTV ad spend will surpass the $20B mark this year, thanks in part to events like the Olympics and the election in November. But they also warn that the channel will still face some pretty steep competition from social and its short-form video formats this year. Thoughts?

Jacob Trussell (Content Marketing Lead): I think there will always be competition for ad dollars, but I don’t necessarily think advertisers should think of Connected TV and short-form video platforms as competing with each other. They need their ad dollars in both channels because if they’re looking for any kind of audience, CTV and short-form video channels are where they will most likely be. Those two channels must sit next to each other, not against each other, and always alongside paid search. Because they offer two different kinds of content experiences, audiences don’t view these channels as either/or — and advertisers shouldn’t as well.

Tim Edmundson (Sr. Director, Content): @Jacob Trussell I agree 100%. I think another way to look at this data is that it represents a focus on video channels as a whole. Video creation is an investment in itself, so advertisers looking to do more with that video and get the most out of that investment are going to commit to ad channels that allow them to do that. We see that ourselves — advertisers will repurpose social videos to run on CTV, and vice versa.

Kind of a “rising tide lifts all boats” kind of thing, except the tide is video production and the boats are video ad channel spend. In case the metaphor wasn’t clear…

Jacob Trussell: Absolutely, and I think they’ll get more bang for their “video production budget” buck if that repurposing loop goes from CTV to social, and not the other way around. As we reported in MNTN Research, a Comcast Advertising report in 2023 found that viewers are 58% more likely to recall premium video over User Generated Content. Meaning, advertisers will have a better chance to maximize their investment if they have premium ads paired with premium content.

Frankie Karrer (Associate Content Manager): That’s true! In that article,  Ami Lathia, director of Off-Platform Ad Products at Target’s retail media business Roundel, points out that that kind of cross-platform investment opportunity is also present when it comes to audiences. CTV has super-precise audience targeting and measurement capabilities, and advertisers can use insights from the audiences in their CTV campaigns to inform the rest of their digital strategy.

Isabel Greenfield (Content Marketing Manager): @Jacob Trussell, you mentioned these channels “sitting next to each other,” which makes me think of how many people are sitting on their couch in front of the TV … and literally on their phone. People absolutely consume both these channels (often at the same time), so it makes sense that advertisers should be thinking about them holistically. We’ve even seen from our research that adding CTV creates a halo effect for paid social (including a 9% stronger conversion rate for paid social after adding MNTN CTV).

Tim Edmundson: I think we’ve stumbled on a real advertising truth here: video ad channels should be friends.

Jacob Trussell: The true success of a TV ad campaign are the friends it makes along the way. 

Devon Maloney (Content Editor): Here’s a question for the group: It’s all well and good to say “do both” to advertisers who can afford both, but I think a lot of brands stick to social channels because they believe it’s better on their budget. But when I read that article, all I could think about was how chaotic an election year can be on social media platforms that may or may not have figured out their content moderation situation yet, especially with the rise of AI content. What are some of the other kinds of “costs” of sticking to just social channels, versus making room for CTV in your performance budget?

Tim Edmundson: The missed incremental performance is one cost, for sure. We hear about performance “plateauing” on other channels like paid social when the advertiser hits a certain level of spend. CTV offers another performance avenue where advertisers can generate incremental revenue, site visits, etc., and avoid stagnation.

Stephen Graveman: 100%. And using the channels together with cohesive storytelling has proven to be an excellent way for brands to get prospects down the sales funnel. And as we’re always talking about, it’s important for advertisers today to not put all their eggs in one basket. We’ve seen social channels go down for a day, or come under scrutiny for serving content that’s not particularly brand-safe.

Cat Hauser (Content Marketing Manager): Good point, Stephen! Social media can be a mixed bag, especially in an election year. 

To revisit @Isabel Greenfield’s comment about second-screen usage — it’s interesting to see how brands and media companies are adapting/trying to fit into those consumer habits. For years we’ve been hearing about “shoppable” TV ads, but it looks like NBC is finally taking some real action on that front. I wonder how this all will pan out –- will consumers take action on these new types of ads or will they continue to use their phones while watching their favorite shows and movies? And do we think other major media companies and streamers will follow suit?

Stephen Graveman: It’s going to be very interesting to see how streaming and CTV advertising evolves over the next year. I think a lot of media companies are looking at this next stage of the medium and will be watching each other closely to see what works and what doesn’t.

Speaking of which: did anyone see that Hulu and Disney+ fully integrated this morning? There has been some rising consolidation in the last year or so, but this feels like the first really big one: a media giant harmonizing two very distinct services and making for a more cohesive experience for advertisers and viewers.

Also shout out to the new color redesign that combines Hulu green and Disney+ blue, even if it caught me off guard when booting up the channel this weekend. I like it, I think it makes the channel stand out from the rest, though it seems to be drawing lines on the internet. But hey, it’s driving awareness of the integration. What’s everyone think?

Devon Maloney: I agree, This one has felt inevitable for years, but it’s still sad to lose the lime-green Hulu brand.  

(In other news, brb, putting my Hulu hoodie on eBay…)

Stephen Graveman: CTV has reached a level of maturity where old streaming service gear has become retro-chic.

Devon Maloney: The consolidation isn’t the only big news coming out of Disney recently. Did we all see that they’re getting in on the third-party ad exchange game? Finally?

chart at the bottom that shows “Other” accounting for the highest CTV ad revenues ($10.74B compared to Hulu/Disney+’s combined $4.38B) which kinda/sorta proves that you can’t go all in on Disney+/Hulu and expect top-tier results. You need a robust strategy that hits wherever your audiences are at. 

Also, @Devon Maloney, that Hulu hoodie is only going to appreciate over time. Sell it for a mint in 5 years!

Tim Edmundson: CTV is a fragmented space, which makes it feel like the only way to approach it is to have a strategy that accounts for that inherent split in the audience. Direct deals and working with ad solutions *cough MNTN cough* that offer access to a ton of inventory across different streaming networks and apps.

Devon Maloney: Smooth, Tim. Very smooth.

Tim Edmundson: Subtlety is an art.

Other CTV News You Need to Know:

• Big Brands’ Enduring Love Affair With Product Placement
• ESPN Scores 6-Year, $7.8B Extension for College Football Playoff
• Watching Sports Is a Mess. Can a New Streaming Service Fix That?