Connected TV (CTV) has become a mainstay in advertisers’ video strategies, and most advertisers are betting bigger on the medium this year. Three in five advertisers expect to increase their Connected TV (CTV) ad budgets in the next year and put one-third of their video spending into the medium, according to the inaugural CTV Landscape Report from Advertiser Perceptions. Currently 90% of video advertisers run connected TV (CTV) ads, averaging $33 million annually on ad spending.

“Advertisers are betting on CTV to solve fundamental marketplace challenges—from building reach in a fragmented market to offering addressability as other direct-to-consumer targeting options fade,” said Erin Firneno, VP Business Intelligence at Advertiser Perceptions.

It’s A Budget Priority. To boost CTV advertising, three in 10 advertisers will add to their overall media budgets while the remainder shift dollars from TV or digital video.

The Big Four Dominate. Advertisers consider YouTube (a combination that includes YouTube ads destined for CTV apps and screens and YouTube TV) and Hulu to be the CTV market leaders, with Amazon Advertising (a combination that includes IMDb TV and Fire TV) placing third and Roku fourth. All four leaders hold better than 20-point leads over the rest of the field.

The Mid-tier Opportunity. Many advertisers look beyond the marketplace leaders to build scale in a medium where premium inventory supply remains constricted. This creates an opportunity for mid-tier CTV publishers to showcase their unique programming and audiences, relative cost advantage and comparable targeting capabilities.

They will need to emphasize brand safety as well. While 58% of advertisers believe that mid-tier publishers are essential to keep overall CTV campaign costs down, and 54% believe they can achieve their reach goals by bundling mid-tier options, six in 10 advertisers confront greater brand safety and/or fraud concerns with mid-tier publishers.

“Advertisers want reach, but they won’t settle for it at any cost, especially when it comes to brand, environment and audience accountability, said Lauren Fisher, EVP/Business Intelligence at Advertiser Perceptions”

AVOD Is On The Rise. And DSPs are central to CTV buying as well. While advertisers most commonly buy CTV ads from device manufacturers, they expect to buy more from Advertising Video on Demand (AVOD) platforms over the next year. Currently, 70% buy from device manufacturers, 64% from AVOD platforms and 63% from Virtual Multichannel Video Programming Distributors (vMVPDs). In a year, that will shift to 71% with AVOD, 70% with device manufacturers, and 62% with vMVPDs. More than 90% of advertisers have bought CTV ads programmatically in the past year to get better pricing, ease of use and measurement.

Understand The Agency-Marketer Divide. Agencies have roots in linear TV. Marketers are more likely to be digital-first. This difference may impact who they consider advertising with and how they buy CTV inventory. Agencies, not surprisingly, are more familiar with the AVOD offerings from linear TV networks.

Advertiser Perceptions interviewed 306 advertisers (50% marketer, 50% agency) in May for the inaugural CTV Landscape Report.