Connected TV advertising is all the rage as more and more dollars flow from linear TV to content streamed via smartphones, tablets, and other devices straight into viewers’ homes.
Despite the popularity of this digital advertising medium, there are some critical challenges of CTV advertising. Visibility into where a CTV ad runs and who it’s reaching is problematic due to data fragmentation. It’s also challenging to measure and track KPIs on CTV. How can the industry navigate these complexities so advertisers get the most out of their investment?
The digital advertising industry loves its acronyms, but it’s no different for the TV advertising space. These terms are often used interchangeably, but they are not the same. Here are some truths about TV:
Advertisers looking for OTT impressions in CTV environments will find them primarily in AVOD or ad-supported environments. Advertisers must remember that each of these models and services attracts different users they can analyze based on the platform(s) or service(s) they utilize. Consumers might get their sports content from one provider, like Fubo, and their news from a completely different one. Services providing higher-quality content or better experiences will attract users who will (likely) pay a higher subscription fee, like YouTubeTV.
OTT advertising is an increasingly attractive option thanks to the speed of growth in consumer adoption, ensuring brands show ads where their audience spends their time. CTV is an accessible channel for all advertisers, not just those with significant budgets, to invest in upfronts to reach audiences previously not part of their mix. CTV also allows advertisers to test, learn and discover new content at a fraction of the cost of traditional TV. Advertisers also benefit from the ability to reach their target audience in ways they’ve come to expect in the digital media ecosystem, like geo-targeting and audience targeting, in high-quality, long-form TV environments.
This is why the digital advertising industry increasingly shifts linear television dollars to digital ad budgets. For the first time, U.S. adults are expected to spend more time watching digital video than traditional TV, according to Insider Intelligence’s eMarketer research. CTV remains the fastest-growing major ad channel, with its ad spend expected to increase 21.2% this year to $25.09 billion. Not all households have cut the cord on traditional TV, but cords are definitely fraying. According to research from Roku, half of all US homes will be cord-cutters or -nevers by 2024.
If you’ve ever looked at a post-campaign report of where you ran on a CTV buy, then you know the report is filled with IDs that often look meaningless, yet there are many of them. Surprisingly, this is also an issue for the buying and selling platforms. The IDs are meant to provide an understanding of the ad opportunity. Still, with no standardization and the overwhelming number of ways that an ad opportunity can be sold to an advertiser, this has led to further fragmentation in the buying process.
As a result, buying platforms cannot surface meaningful data to advertisers for targeting with any level of confidence. This limits the targeting available to advertisers. Currently,
targeting OTT and CTV in the buying channel is limited to technical attributes, such as device, operating system, connection speed, and audience—to the extent those have been matched up. There is very little data available about the content a consumer is watching at the moment.
“The measurement part is a challenge. Even trusting and knowing that your ads will show up where you want them to is a challenge, and that you’re not over-serving on one platform,” said Andy Rhode, head of media and social at Fallon ad agency, in a recent Digiday article on CTV.
The article says video advertising has historically been hard to measure, but the CTV landscape “is saddled with curious reselling practices and fears of ad fraud.” The general measurement approach to CTV has depended on impression delivery rather than conversions or brand awareness lift. But impressions don’t fully explain who you’re reaching and where viewability and video completion rate can be. Much like Nielsen has been called to task for its questionable measurement practices, advertisers are demanding the CTV industry figure out how to standardize video ad metrics and attribution. In addition, opaque practices often result in ad buyers thinking they’re buying premium CTV inventory when it’s cheap and poor quality.
Part of remedying these issues lies in pursuing adtech partnerships that give visibility and value-add in CTV buys, from their advertising platforms to their brand safety vendors. The zenith is being able to run campaigns on CTV that reduce waste, improve performance, and maintain brand reputation. Marketers must translate real-time viewer information into targeted advertising across apps and streaming platforms to maximize their budget.
Peer39 enables all of the above with our Transparency Report for CTV, which gives advertisers insight into the kind of content or streaming video on which their ads run so they avoid low-quality and non-professional placements. By making sense of fragmented and unstructured data in CTV, our reports are more uniform and digestible to give a complete picture of metrics like ad completion rate, channel, content categories, production type, and show level.
CTV will continue facing several challenges in CTV.
First, there’s no simple, single way to make ad buys for CTV. You can buy from the content owner (video publisher), TV network, distributor, streaming service provider, device manufacturer, specialized programmatic platforms, aggregators (like Pluto or Sling), aggregators of aggregators (like Roku and Amazon), and marketplaces. Each has its own pricing model and delivery specifications, which makes CTV buys time-consuming, complex, and inefficient.
Fragmentation is not solely restricted to the content side. It also applies to consumer viewership as well. Audience attention is distributed across multiple services, platforms, and apps with no unified point of access or insight. Budgets also pose challenges for advertisers, especially when macroeconomic factors sometimes negatively impact ad spending. CTV is significantly more expensive than digital video CPMs and comes with targeting limitations and consistency in inventory availability.
In addition, three of the largest CTV platforms, Amazon, Samsung, and Roku, operate their own DSPs, each having privileged access to their respective company’s user data and exclusive access to some inventory. Sometimes, these DSPs buy ads beyond their platform inventory by “plugging into different programmatic marketplaces and setting up deals with publishers.”
All of this makes for an uneven playing field, and the complexity for advertisers as they’re buying CTV is not necessarily limited to specific platforms like Amazon FireTV, Samsung, or Roku. As a result, each advertiser will take a different route, and the majority of advertisers
will need to employ a multi-DSP approach to build out their CTV strategies, requiring two or more platforms.
Fragmentation is also found behind the scenes in communication between various ecosystem participants looking to transact on OTT-CTV. The problems that affect programmatic buying platforms and publishers with CTV inventory are directly connected to the challenges advertisers face.
However, the advertising industry is pursuing some significant changes to CTV advertising in 2023:
With the help of modern brand safety and suitability tools, along with tools like our Transparency Report for CTV, brands can take advantage of the opportunities in CTV, optimizing ad spend at a reasonable cost. Echoing some of our points above, there are several vital reasons why brands should invest in CTV in 2023:
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