CTV viewership nears pandemic highs as platforms balance ad loads
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A new report from connected TV platform Wurl shows that viewer engagement on CTV has grown steadily in 2024, nearing the high levels seen during the COVID-19 pandemic.
The “CTV Trends Report 2024” report analyzes data on viewing habits, ad loads and other metrics across CTV platforms. Key findings include:
- Average daily hours of viewing increased 5% in Q3 2024 compared to Q3 2023.
- Average session length rose nearly 7% in Q3 2024 versus the same quarter last year.
- Churn rates have stabilized and shown a slight downward trend over the past three years.
- Ad fill rates in 2024 are lower compared to previous years, likely due to increased supply in the market.
The findings reflect an industry recovering from a dip in viewership and session length following the pandemic. However, ad fill rates have declined, likely due to the rise in available CTV channels.
The report indicates that CTV engagement is growing after experiencing a dip following pandemic highs. However, Ron Gutman, CEO of Wurl, noted that growth is not at previous levels, citing ongoing challenges with electronic program guides and user experience.
Viewership trends
Average daily hours of viewing (HOV) for CTV have rebounded, increasing 5% in Q3 2024 compared to Q3 2023. This growth brings viewership levels close to those observed during the peak of the COVID-19 pandemic.
Session length, which measures how long viewers engage with content before switching or ending their viewing, has increased by nearly 7% year-over-year. This suggests viewers are becoming more engaged with CTV content.
Churn rates, indicating the percentage of users who stop using a service, have stabilized and shown a slight downward trend over the past three years. This points to improving viewer retention on CTV platforms.
Content preferences
Reality TV emerged as the most frequently scheduled genre on ad-supported CTV platforms. This was followed by drama, documentary, lifestyle, crime, mystery, and comedy genres.
Holiday-themed channels demonstrated strong performance, with viewership spiking to four times the usual levels during December. Notably, about 25% of this elevated audience continues to watch holiday content throughout the year.
Advertising metrics
Ad load, which measures the amount of advertising per hour of content, peaked in July 2023 at 9.4 minutes per hour. It has since declined slightly, suggesting platforms may be adjusting their strategies to balance revenue with viewer experience.
Ad fill rates, indicating the proportion of available ad inventory filled with advertisements, have shown seasonal variations. December typically sees the highest fill rates, while January experiences the lowest. The report notes that 2024 has seen lower fill rates compared to previous years, likely due to an increase in available ad inventory.
A typical ad break on CTV lasts about two minutes and usually contains four 30-second commercials. Over an hour, viewers of Free Ad-Supported Streaming TV (FAST) channels are exposed to approximately nine minutes of advertising content, which is generally lower than ad loads on traditional cable TV networks.
Wurl’s researchers emphasize the importance of balancing ad load with viewer experience.
They note that while increased ad loads may boost short-term revenue, excessive advertising can lead to viewer dissatisfaction and eventual churn, potentially harming long-term profitability. The report also highlights content preferences, with reality TV emerging as the most frequently scheduled genre on ad-supported CTV platforms. Interestingly, holiday-themed channels show strong performance year-round, maintaining about 25% of their December peak audience throughout the year. Despite these positive trends, industry challenges persist, including issues with electronic program guides and user experience, which may be limiting growth potential according to Wurl CEO Ron Gutman.
Industry challenges
Despite the growth in viewership, Ron Gutman, CEO of Wurl, highlighted ongoing challenges in the CTV industry. These include issues with electronic program guides (EPGs) and user experience, which may be limiting growth potential.
The report suggests that as CTV content supply increases, maintaining ad fill rates becomes more challenging. This could lead to downward pressure on ad rates or push publishers to increase ad loads, potentially affecting viewer experience.
The findings indicate that while CTV engagement is growing, the industry faces a complex landscape balancing content offerings, advertising strategies, and user experience to maintain growth and profitability.
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tags
Connected TV, Free Ad-Supported Streaming Television (FAST), Wurl
categories
Advertising, Featured, Market Research Reports & Industry Analysis, Streaming