Connected TV (CTV) ad spend in the U.S. is expected to continue growing over the next few years, topping $34 billion in 2025 and $42 billion in 2027, according to eMarketer. But as with linear TV before it, CTV requires advertisers to pony up on production costs before they can enter the market.
Artificial intelligence (AI) promises to help advertisers generate video creative quickly and cheaply from prompts and image assets. Such tools have been developed by ad-tech firms and platforms including Meta and Amazon, and are already finding purchase with advertisers.
Ad-tech firm Kargo is uniting the power of AI and the reach of CTV with its Narrative format, which brings together marketers’ existing audio assets with engaging visuals. The offering launched in August and is helping brands avoid the one-size-fits-all approach that results from high production costs and short launch timelines, according to Kargo Chief Operating Officer Michael Shaughnessy.
“Oftentimes brands treat CTV the same way as they would linear, but CTV has far more opportunities. With the expanded capabilities comes a specific set of challenges that marketers have to learn to navigate,” Shaughnessy said in emailed comments.
Sierra Nevada was an early adopter of Narrative, using the format to drive awareness of the independent craft brewer’s brand refresh. Kargo combined the brand’s still images with audio featuring its new tagline to create CTV ads that ran on streamers such as Paramount and Tubi and outperformed industry benchmarks.
Kargo’s ads outpaced attention metrics for both CTV (+29%) and linear TV (+20%), notching even better performance among millennials (+46% for CTV and +30% for linear), according to TVision data shared with Marketing Dive. With higher attention metrics, Kargo is 75% more cost-efficient in driving attentive impressions, assuming the same CPMs, the company claims.
“We’re thrilled to see that Sierra Nevada’s Narrative CTV ad has resonated so strongly with viewers,” said Catherine Gilham, group director of media and investment at Ars X Machina, Sierra Nevada’s media agency, in a statement. “This success not only highlights the strength of our creative approach, but also reaffirms our commitment to engaging consumers in meaningful ways that elevate the Sierra Nevada brand.”
By using AI to put the “art in ad tech,” Kargo’s Narrative allows advertisers — no matter the size — to reach their audiences on CTV by bringing the cost of production close to zero, Shaughnessy explained.
“This unit has been proven to drive attention, engagement and memorability — KPIs that often lead to a better bottom line,” the executive said.
