What We Need to Talk About When We Talk About Connected TV
This upfront season, TV networks and digital players increasingly pointed to over-the-top (OTT) offerings as a critical part of their strategy to attract and deliver audiences.
With the growth of streaming apps available through the TV glass come new opportunities for advertisers to connect with consumers in the living room. In the past year alone, we've seen an almost 10% increase in the number of people who have access to a connected TV device, with daily viewing minutes doubling on average every year since 2012.
As OTT consumption has moved from a rising trend to the mainstream, we've seen even more digital-first and TV media companies invest in new connected TV offerings and direct-to-consumer streaming services. And while these shifts have captured industry conversation, it's essential we make sure we're talking about the need for transparency in this market amidst its rapid growth. The opportunities in connected TV are real and growing, but for them to be fairly monetized they need to be objectively measured.
Wide Adoption and Market Growth for Connected TV
Over the past five years, TV viewers have embraced connected devices from brands like Amazon Fire TV, Apple TV, Roku and others as a way to watch programming. While linear TV still represents the majority of viewers’ watch time—with over 132 hours of linear TV viewing per month versus 42 hours per month using connected TV devices—there's no question the OTT space is a major growth market.
At Nielsen, our data shows that two-thirds of Americans own at least a single connected device, enabling 224 million people to consume media and advertising on their terms, from catching a live episode of their favorite sitcom to binge-watching an entire season of a show through an OTT app. Simply put, connected TV has made living room viewing a more personalized, choice-driven experience and has opened the door to new premium opportunities for advertisers to connect with consumers.
Understanding Connected TV Audiences
As part of our research, we're not only able to capture the time audiences spend streaming video through connected TV devices, but the profile of these viewers and the content and ads they're exposed to. We know that OTT viewers are younger on average, with people under the age of 34 spending the most time watching on these devices. We know that homes with streaming devices are 30% more likely to be higher income, earning more than $100,000 per year. All of these traits have made CTV audiences the focus for advertisers looking to find valuable, harder-to-reach targets.
With consumers more and more often turning to their connected TV device for living room viewing and competition among device manufacturers continuing to accelerate, the questions we now need to be asking are these: How do we make sure that consumer behavior and audience profile across the connected TV landscape are well understood? How can marketers comparably evaluate audiences to commit their dollars and transact in the OTT space with confidence?
As a company with a history of bringing transparency into the media ecosystem, we believe independent, comparable measurement is the key.
Translating Growth to Monetization with Measurement
Consumers now enjoy an unprecedented array of options, which means it's never been more important for marketers to have a clear look into audiences and their behavior in order to successfully execute campaigns and cultivate strong brand connections. Today, Nielsen enables media buyers and sellers to understand and verify connected TV audiences with independent measurement that provides this needed holistic view.
We're capturing audiences for both content and ads on Roku and Hulu using metrics that are comparable across connected devices and linear TV as well as smartphones and tablets. Yes, that's challenging, but we've made good progress in showcasing the value of these audiences. Also, we're capturing skinny bundle viewers on YouTubeTV and Hulu Live and have included them in the official TV ratings and C3/C7 currency. And we're providing coverage of the industry's largest OTT platforms through our measurement, most recently with Hulu endorsing Digital Ad Ratings as its official currency to give advertisers a vital view into viewership consistent with TV.
The adoption of connected TV devices has transformed the television into a multi-platform experience. It has also resurfaced a familiar challenge: the need to comparably capture and understand audiences across platforms and devices.
*Source: Nielsen National Panel (based on scaled installed counts and percentage of universe) includes internet-enabled smart TVs, game consoles and internet-connected devices.