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February 7, 2024 | By Robert Williams

LAS VEGAS – Millions of households have connected their televisions directly to the internet to expand their choices of programming among a variety of apps, including many advertising-supported ones that are free to watch. Brands want to reach these audiences, but they face some impediments with CTV advertising.

“The reason why we’re not moving fast enough is because of the scarcity of inventory and because the pricing is still out of whack to what advertisers have been paying on linear television,” Kelly Metz, chief investment officer at Omnicom Group’s OMD USA, said in this interview with Beet.TV contributor Mike Shields at CES 2024.

“You had this incredible brand-building medium at the right price in television that was built up over decades, and now you’re moving to a fully addressable medium with extreme scarcity,” Metz said. “Until that scale increases and those price points drop, you’re still going to have a challenge there.”

These dynamics have pushed advertisers to be more innovative in telling a brand story. In many cases, marketers are spending heavily on social media and collaborating with influencers who have built up an audience of followers.

“You can tell brand stories in very cost-effective ways in those environments,” Metz said, “and potentially achieve the same result you once achieved in historical linear television, which is brand awareness, brand recall and ultimate purchase. That’s really the goal.”

Apps such as TikTok, Instagram, Snapchat and YouTube have troves of video content that creators are seeking to monetize. The greater specialization of content, including scripted programming, helps to drive audience engagement.

“There’s a reason why connected television is more expensive. It’s because you’re capturing more attention, potentially, particularly if you’re in a scripted format and you’re going to have more recall, and more resonance with those ads that you place,” Metz said, “but because of the cost, you have to balance that with broader brand initiatives.”