Skyrocketing growth of streaming audiences has spurred an insatiable desire for advertising on these platforms. Having spent most of the year on the front lines meeting with hundreds of local agencies and ad buyers, here’s my assessment on the lessons learned in the connected TV (CTV) advertising market for 2018.
The fourth quarter saw the largest spike in the cord-cutting trend as more than 1 million consumers canceled their cable TV or satellite subscriptions. CTV has emerged as the fastest-growing video segment this year, with marketers planning to dramatically increase their CTV budget commitments, according to an Advertiser Perceptions study. At the same time, the fragmentation of the streaming TV ecosystem is only getting worse as direct-to-consumer (DTC) streaming services are popping up on a weekly basis.
For many agencies and brand marketers, the perception of CTV is that it’s still an emerging market made up of a highly complex network of players, which makes the buying experience confusing. There’s still a lack of understanding of the differentiation in inventory quality and execution among providers as each platform has its own set of targeting parameters and measurement approaches. More importantly, when it comes to budget, marketers are still figuring out whether CTV should be part of the TV or digital budget or whether it stands on its own.
Scale and inventory are leading concerns
Scale remains the leading obstacle for marketers. The explosion of streaming options makes it difficult to aggregate audience reach and build scalable media plans when applying granular addressable targets, especially at the local and regional level.
When it comes to inventory, it’s even more perplexing for marketers to know what they’re really buying. While savvy marketers know that premium video is the brand-safe choice, those that buy inventory on open exchanges may not be getting premium inventory. In a programmatic environment, a campaign is not guaranteed to run on any particular publisher; commercials can literally be served to hundreds of unverified networks, platforms and viewers, which means greater risk of fraud and uncertain delivery.
The scale that is now emerging in CTV not only allows marketers to begin to drive addressability but also more precisely target their audience across interest categories at the household and down to the viewer level while offering the ability to make a single buy across every OTT platform at scale.
Prove CTV spend effectiveness
The allure of CTV is that it offers the best of the big screen viewing experience with digital media’s precision. Advertisers are reaching the most engaged audience, as the chance of a viewer navigating away from an ad served on a self-selected show is low. And since CTV ads are non-skippable, the completion rate typically averages 95 percent or higher.
To prove the value of their spend, marketers need to better understand how data-driven, audience-based campaigns can drive sales, awareness and purchase intent. Thus, a hot topic for marketers is attribution in CTV and whether scale exists to do that.
So how does attribution work in a CTV ad campaign? The Interactive Advertising Bureau (IAB) defines this as tying household level exposure to measurable outcomes by identifying a set of user actions that contribute to a desired outcome.
Capabilities exist on OTT platforms that allow a marketer to track whether somebody took a desired action after they’ve viewed a CTV ad. For example, an auto dealer can measure whether a viewer has visited its website to schedule a test drive or if they went to the dealership and purchased a car. This level of online and offline attribution gives marketers richer insights on measurable outcomes from their CTV spend.
Having alignment on the KPIs and metrics for measuring success is the cornerstone of showcasing the value of CTV spend. Proving value begins by setting clear definitions of KPIs and expectations on spending early on. This will help marketers determine which solutions offer the biggest ROI on the impact metrics that matter, whether its brand awareness or driving online or in-store traffic.
A premium CTV experience is paving the future of advertising, one that’s set to get even bigger in 2019, in delivering an immersive and personalized experience by making sure that both advertising and content is highly relevant for the consumer.