LG’s new ad formats show the race for CTV dominance

The news: LG is now showing ads on its smart TV and connected TV (CTV) screensavers, which appear before default screensavers load. These ads will be turned on by default for LG users but can be switched off and will be displayed across apps and services on LG devices.

Zooming out: CTV and smart TV screensaver ads are not a new development. Roku debuted sponsored ad space on its iconic Roku City screensaver last year, and more CTV apps and manufacturers have started implementing “idle” ads on screensavers and paused content.

• But the new ad format shows how CTV platforms are racing to increase ad space and variety as more spending floods to the channel.
• CTV ad spend growth is slowing somewhat now that the digital channel is firmly established itself, but it will account for all growth in the converged TV market beyond 2024, per our March forecast. The ability to highly personalize and target advertisements is attracting advertisers of all sizes from all industries.
• That demand is causing CTV platforms and apps to launch a flurry of new ad formats—LG included. Fubo is leaning on interactive ads and home page takeovers, Amazon has debuted customizable ad slots for different demographics, and several CTV apps are integrating pause ads.
• The market is anything but established as new players are also looking to enter the fray. Earlier this month, Ad Age reported that The Trade Desk was planning to develop a CTV operating system and could possibly acquire an established player.

Our take: The rapid pace of CTV ad innovation highlights a scramble between players for dominance of the promising ad channel. Signal loss in other well-established ad channels hasn’t hit CTV advertising’s targeting capabilities yet, making it an appealing platform for advertisers struggling to reach consumers.

But change could be looming on the horizon: The FTC recently released a scathing report criticizing digital advertising’s surveillance capabilities and called for regulation.