Pixalate and XUMO recently hosted a webinar to discuss the latest trends in programmatic Connected TV (CTV) advertising in 2020 — and what those trends mean for the future of CTV.
Webinar speakers included:
According to Pixalate’s data, by the end of 2020, 78% of U.S. households were reachable via programmatic CTV advertising — up 56% year-over-year.
“ was a very, very big year for expansion in CTV,” said Pixalate’s Scharffs during the webinar.”Not only did we see the growth of reach, but also the growth in ad spend has increased.”
Global programmatic CTV ad spend increased 97% year-over-year, per Pixalate’s data, including a big spike over the second half of 2020. Scharffs noted that while the COVID-19 pandemic slowed programmatic CTV growth a little in Q220, it did not stop the growth.
“It was still up approximately 10% [in Q2], but the CTV ad market did not regress in Q2 like other markets,” said Scharffs. "And we saw a considerable rebound in the second half of 2020.”
Given the big jumps in CTV ad spend and household reach, it’s not a surprise to learn that user engagement on XUMO’s app — one of the leading CTV apps in the world featuring over 300 free channels — also went through a phase of rapid growth in 2020.
According to XUMO, engagement on their app during the COVID-19-related lockdowns was up 250% compared to pre-COVID numbers.
“It pushed a lot of folks into free ad-supported streaming services like XUMO,” said XUMO’s Condon, noting that a few other factors also drove the growth, including "the adoption of streaming in general [and] the adoption of different devices like Roku, Amazon, or, more importantly, Smart TVs.”
According to Pixalate’s data sets, which consist predominately of open auction programmatic traffic sources, programmatic CTV ad fraud rates were between 19% and 24% throughout 2020.
This means that as CTV ad spend skyrocketed, scammers watched their bank accounts grow in lockstep.
Multiple CTV ad fraud schemes were uncovered last year, including the Monarch and DiCaprio discoveries made by Pixalate’s research team. These schemes depict the various ways in which scammers are attacking the booming CTV space.
But there are positive signs as well. For one, Pixalate’s data revealed that 80% of the top 500 apps in the Roku Channel Store (based on programmatic ad sales, as measured by Pixalate) had adopted the IAB’s app-ads.txt initiative by the end of 2020, which aims to increase transparency and reduce ad fraud.
Also, companies like XUMO meet the issue of ad fraud head-on and can reduce risk as a result.
“With any business, you have to work with accredited partners. You have to work with ... companies that take it seriously like we do, [companies] that have a partner like Pixalate,” said XUMO’s Condon. “You need to know what you’re buying. The transparency piece, to us, is extremely important.”
Condon spelled out the three basic steps XUMO takes to maintain quality:
Pixalate’s data shows that 46% of programmatic CTV ads went to Roku devices in Q420, by far the largest market share of all CTV device manufactures.
However, device manufacturers are ramping up their efforts to earn a bigger slice of the pie. That is especially true for Smart TV makers.
“When Smart TVs first came out, they weren’t particularly smart,” said Condon. “People were sleeping on Smart TVs for the longest time, and now they are not. The growth has been tremendous. They have invested in the operating system, the experience, and partnerships.”
A new report from Hub Entertainment Research shows that Smart TVs are now in 70% of U.S. homes, per MediaPost.
Watch the whole webinar on YouTube or embedded in our blog above to learn more.
Pixalate’s Q4 2020 Connected TV Ad Supply Trends Report also contains more data on the latest state of programmatic CTV advertising.
Disclaimer: The content of this blog reflects Pixalate’s opinions with respect to the factors that Pixalate believes can be useful to the digital media industry. Any proprietary data shared is grounded in Pixalate’s proprietary technology and analytics, which Pixalate is continuously evaluating and updating. Any references to outside sources should not be construed as endorsements. Pixalate’s opinions are just that - opinion, not facts or guarantees.
Per the MRC, “'Fraud' is not intended to represent fraud as defined in various laws, statutes and ordinances or as conventionally used in U.S. Court or other legal proceedings, but rather a custom definition strictly for advertising measurement purposes. Also per the MRC, “‘Invalid Traffic’ is defined generally as traffic that does not meet certain ad serving quality or completeness criteria, or otherwise does not represent legitimate ad traffic that should be included in measurement counts. Among the reasons why ad traffic may be deemed invalid is it is a result of non-human traffic (spiders, bots, etc.), or activity designed to produce fraudulent traffic.”