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Inside the CTV Revolution of 2023

The Connected TV (CTV) industry is facing significant changes in 2023, brought on by a combination of factors such as the cost-of-living crisis, decline of third-party data, and the increased fragmentation of the ecosystem. Brands will have to adapt to a rapidly evolving business environment, including the possibility of a recession and technological and regulatory changes.

The rise of Advertising-Based Video on Demand (AVOD) and the proliferation of hybrid models, such as Netflix and Disney+, will lead to increased audience fragmentation. However, it is unlikely that there will be a sharp polarization in the audience as the looming recession and “subscription fatigue” might cause consumers to turn to their preferred AVOD or hybrid platforms, regardless of their financial condition.

In response to the fragmentation of the audience, there will be a homogenization of franchises, with global franchises operating across different entertainment formats dominating the scene. The increased fragmentation will prompt these platforms to focus on their Unique Selling Proposition (USP) and new commissions on existing IP, but there may be a deceleration in investment into new and original content. Smaller and local broadcasters with limited big-ticket IP may struggle, and being original and experimenting with new formats may help them face the competition from fierce worldwide rivals.

The demise of third-party cookies will not negatively affect addressable TV as it has been built around alternative methods such as geo-based targeting. There will be an enhanced focus on commerce data, which will boost performance advertising, particularly for Direct-to-Consumer (D2C) brands. There will be more consistency in targeting between TV and other devices, and budgets might shift from cookie-reliant digital formats into TV. The omnichannel solutions will be a hallmark of 2023.

Addressable TV will provide brands with ample opportunities to experiment beyond the thirty-second spot, and new ways to interact with viewers and drive commerce, such as using voice, will become more prevalent. Addressable creative can boost resonance with viewers and will be essential to connect investment in creativity with real business returns. Brands that successfully combine creative minds with technological advancements are likely to see the biggest uplift in results.

While 2023 will be a challenging year, it will not necessarily be a “bad year.” Increasing marketing investment will be critical to ensure brands stand out from competitors and come out of the downturn in a stronger position. Addressable TV has the targeting and measurement capabilities to provide advertisers with a sense of confidence that their spending is effective and efficient in boosting sales in the short term and building brand loyalty in the longer term. Tougher times often stimulate innovative solutions and foster new forms of business.

Pesach Lattin
Pesach Lattinhttp://www.adotat.com
Pesach "Pace" Lattin is one of the top experts in interactive advertising, affiliate marketing. Pesach Lattin is known for his dedication to ethics in marketing, and focus on compliance and fraud in the industry, and has written numerous articles for publications from MediaPost, ClickZ, ADOTAS and his own blogs.

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