2023 in Review: The Three “C’s” That Defined the Year in CTV Advertising

This year was marked by significant shifts within the CTV advertising landscape, which gave rise to key advancements benefitting both media buyers and sellers. 

In 2023, the CTV advertising ecosystem navigated a number of exciting yet disruptive dynamics. Amid macroeconomic uncertainty, the industry grew roughly 20% – set to hit nearly $25B in ad spend by year's end. Viewership increased across the space, with much of the growth coming outside of the top six services. And cord cutting continued, with only 42% of U.S. homes subscribing to a traditional pay TV service.  

Amid all of the transformative change that 2023 brought, three core industry themes stood out in our view: Curation, Contextual, and Convergence. 

1) Curation.

Supply path optimization (SPO) gained more steam in 2023, as media buyers and sellers continued to prioritize quality, directness, and transparency in their programmatic supply chain(s). This trend gave rise to an increasing number of advertisers seeking to work directly with supply-side platforms (SSPs), with 58% of advertisers adopting this type of approach (or planning to) and 37% seeing a direct-to-SSP relationship as a boon to their DSP partnerships. 

Amid these shifts, increased emphasis was also placed on inventory curation and supply-side ad targeting﹘two closely related practices garnering adoption among media buyers. As our VP of Product, Amit Nigam, recently defined, 

“Supply-side ad targeting involves layering audience and contextual segments directly on top of publisher(s) inventory via a supply-side platform (SSP). This type of targeting effectively shifts the application of data and curation of inventory closer to the seller…” 

By curating inventory and targeting ads on the supply-side, programmatic media buyers are benefiting from higher data match rates against specific audiences; a critical component for ensuring ample campaign scale. In fact, during an Advertising Week NY discussion on CTV Trends this October, one panelist revealed that they see a nearly 30% increase in average match rates when applying data on the supply-side versus the demand-side. 

To better support this type of ad targeting and inventory curation, Beachfront this Fall introduced a new self-serve deal ID curation platform, Beachfront Select. Launched with support from close partners at Audigent, IRIS.TV, and Strategus, the platform has helped users more easily plan, create, and activate data-enabled PMPs as SPO and sell-side ad targeting take hold in the industry. 

Heading into 2024, curation will only grow in importance as buyers and sellers continue to prioritize quality, transparency, and control in CTV.

2) Contextual.

In the CTV advertising industry, the lack of contextual transparency is one of the most nuanced (and often debated) topics. While linear TV and even digital display ecosystems have readily included contextual information for some time, CTV has been lacking due to a mix of technical limitations and business considerations. In 2023, however, significant strides were made as publishers shared more data in the bidstream and emerging technologies like AI brought new capabilities to bear. 

To illustrate, Beachfront’s H1 2023 CTV Marketplace Insights Report revealed rising incidences of Genre, Network, and Channel in the programmatic ecosystem, as media sellers made more of these content-related signals available for buying. In a Future of TV briefing, Digiday’s Tim Peterson noted:

“CTV ad sellers seem to be gravitating toward sharing more content-related signals associated with their ad impressions, in part, as a means of better competing in a streaming ad market where supply has grown to the point of exceeding advertiser demand.”

Beyond rising usage of these signals, the year also brought an interesting infusion of AI and contextual targeting. In October, the newly-formed Alliance for Video-Level Contextual Advertising (AVCA) released research demonstrating the significant impacts that AI can have on advertising resonance. Key findings from the inaugural AVCA report (which were covered in AdAge) show that AI-enriched contextual targeting significantly outperforms generic demo data and publisher-declared metadata in capturing viewer attention. 

Looking ahead to next year (and even beyond), contextual capabilities will continue to expand and grow in CTV, and the resulting transparency will help to drive further investment in the medium.

3) Convergence.

Building on convergence from prior years, linear TV and connected TV remained on a crash course as the lines between the two mediums became nearly-indistinguishable in 2023. This was perhaps no more evidenced than at the annual Upfronts and Newfronts, in which “the end of the ‘Mad Men’ era [gave] way to CTV,” as eMarketer Analyst Paul Verna put it.

While there is still some work to be done in solving for fragmentation and in bringing greater standardization to the TV ecosystem, many media buyers and sellers took a more converged approach to advertising and monetization this year. As an example, Spectrum Reach – the ad sales division of Charter Communications – tapped Beachfront to unify their programmatic monetization across traditional TV, CTV, and online video. 

Our CEO, Chris Maccaro, shared his thoughts on the significance of the partnership at the time of the launch: 

“As CTV and traditional cable TV have converged, media owners and distributors have sought more consolidated, efficient ways to manage and monetize their premium ad inventory. Our partnership with Spectrum Reach is another exciting example of how Beachfront’s award-winning technology is helping modern TV media sellers unlock the full value of their multi-screen inventory and streamline ad operations.”

Over the next few years, the industry will likely take further steps toward a fully-programmatic, impression-based buying model that encompasses all of “TV”.

Full Steam Ahead to 2024

With 2024 on the horizon, there are a number of reasons to be optimistic about the CTV advertising landscape. Quality and transparency continue to improve. CTV’s digital nature has made TV advertising more accessible for brands of all sizes. And the CTV ecosystem as a whole is continuing to evolve and expand. 

What did we miss?

Drop us a line, here, if we missed any key themes or takeaways from 2023. And if you’re interested in learning more about what Beachfront has planned for 2024, reach out to us here or schedule a meeting with us at CES.