CTV advertising bypassing digital media's awkward teenage years

Who remembers the awkward stages of moving print ads to digital?

Not too long ago, advertisers were tasked with moving ads from the pages of print newspapers and magazines to digital publisher pages. The initial instinct was to do a one-to-one translation, assuming that the internet functioned just like the real world.

Advertisers bought digital ad spaces and bundles with individual online publishers, just like they used to do with individual print publishers. But that was 1994—almost three decades ago—and the in-between space is where digital advertising really “grew up” and continues to grow.

Over time, brands moved away from inefficient content adjacencies, adopting third-party cookies and rudimentary targeting as a mainstay. But as things became even more sophisticated over time, accurate, stable identity solutions came into the picture. Brands can now serve personalized ads across digital channels to real individual consumers—not through just cookies, devices IDs or individual publishers.

This has not only improved the advertiser experience—because marketers have more control and transparency around targeting and measurement—but it also improved the consumer experience because ads are served to the consumer based on what they want, not just overserving a generic ad over and over. 

What does all of this have to do with connected TV (CTV) advertising? Well, everything.

TV is the latest medium to go digital

Smart, connected TVs are making their way into homes around the world at an exponentially growing rate, and streaming platform apps are increasingly taking the place of linear TV. You likely know at least a few people in your life who are part of the 84.3 million “cord cutters” in the U.S. (yourself possibly included). This digital transformation mirrors that of media.

But many advertisers aren’t learning from the “awkward years” of digital advertising. Put differently, advertisers moving from linear TV to CTV aren’t listening to their digital advertising experts and using those hard-earned lessons.

Since the beginning, TV advertising dollars have been traditionally parceled out among networks based mostly on viewer demographics of shows from panel data.

Today, advertisers are trying to replicate this way of working with TV networks with streaming services like Hulu, Peacock and others. The streaming services offer demographic insights and even targeting capabilities to advertisers, who then parcel out certain amounts of their campaign budgets to each platform—either through run-of-network buys (e.g., investing $100 million in Hulu broadly, targeting a specific demographic) or specific show buys (e.g., investing $50,000 for advertising during one show and $50,000 for another one).

These methods are still fairly contextual or based on that streaming platform’s view of the individual, which can’t be reconciled with the same view on a different streaming platform.

This way of conducting CTV advertising doesn’t take advantage of all the new benefits CTV can bring to advertising when bought programmatically, such as recognizing the same household members or individuals across devices and content platforms. This is critical if you want to maximize your reach or just ensure you are controlling the frequency of your ads. Not to mention the ability to look at your CTV media buys in context to your display, online video and audio buys. 

The savviest advertisers will learn from the aforementioned awkward teenage years of digital advertising and use the connected nature of CTV devices to better understand and reach their best audiences. Advertisers who simply conduct a one-to-one translation between traditional linear TV advertising and CTV advertising will fall behind.


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Programmatic is necessary to get it right

Here are a few reasons why truly connected programmatic advertising is crucial to CTV advertising success.

Recognizing the same household members across devices: A single CTV platform (e.g., Hulu, Peacock, YouTube TV, Amazon Prime Video) only sees their own subscriber base. What happens if someone subscribes to all those platforms, and hops between them every day across multiple devices (a Roku, several different Apple TVs, a Samsung Smart TV, a Nintendo Switch)?

This means if the same advertiser buys from each of those platforms individually, they could be wasting buckets of ad spend by oversaturating a family with the same ads over and over, past the point of diminishing returns because the advertiser doesn’t recognize them when they’re on different content platforms and devices. With a better understanding of each individual through connected identity, the risk of oversaturation becomes a thing of the past.

Inventory fragmentation: About 47% of advertisers agree that inventory fragmentation is a huge issue with CTV—the second largest problem marketers have after accurate measurement.

With CTV, the problem of inventory fragmentation is uniquely challenging: There are publishers, platforms and then devices in between. If an advertiser has direct buys with each, they run the risk of showing up multiple times in the same program.

For example, say you’re watching “This Is Us” on Hulu on your Roku TV. NBC will control some advertising slots, Hulu will control some and Roku will control some. Because all these platforms and providers are siloed from one another, marketers can’t know how many times they serve an ad to a single person.

By the numbers, this is a very sizable problem: On average, publisher campaigns will have a 32% duplication rate in CTV due to the inventory fragmentation.

But if you buy each of these inventory sources programmatically, you have a holistic view of your buy and can set frequency controls.

CTV media buys in context to your full media plan: You shouldn’t conduct a CTV media buy without putting it in context with your media plan across CTV providers andyour full digital media spend. This includes not only your reach goals, but also your ROAS goals. Without connecting to your broader media efforts, it simply won’t be properly optimized and will create ad waste and disconnected consumer experiences.

Skip the awkward years, and start with connected identity

Just like how today’s digital advertising—grounded in accurate privacy-safe identity—connects individuals to all their non-TV devices, the same principles can be applied for both individuals and households with CTV devices. TV advertisers can—and should—benefit from the awkward in-between years of digital media, moving straight from having direct ad buys with each platform to a strategy that optimizes each ad buy to the individual or household.

And the benefits are manifold; this approach enables maximum reach, precise frequency management, accurate measurement and better experiences for viewers of CTV ads. A connected ID strategy allows advertisers to start with the consumers—not separate streaming services and platforms.

It’s time for TV advertisers to embrace the nature of connected TV. Can your advertising be as connected as CTV?

This article was originally published on Adweek, March 2022.