Not so long ago, advertisers were responsible for moving advertisements from the pages of print newspapers and magazines to the pages of digital publishers. The initial instinct was to do a one-to-one translation, assuming the internet worked just like the real world.
Advertisers purchased digital ad space and bundles from individual online publishers, as they previously did with individual print publishers. But that was 1994, almost three decades ago, and the space in between is where digital advertising really “grew up” and continues to grow.
Over time, brands have moved away from ineffective content adjacencies, adopting third-party cookies and rudimentary targeting as their mainstay. But as things got even more sophisticated over time, accurate and stable identity solutions emerged. Brands can now deliver personalized ads across digital channels to real, individual consumers, not just through cookies, device IDs, or individual publishers.
This has not only improved the advertiser experience, as marketers have more control and transparency over targeting and measurement, but it has also improved the consumer experience, as ads are delivered to the consumer depending on what it wants, and not just by surserving generic advertising over and over again. .
What does all this have to do with advertising on connected television (CTV)? Well, everything.
Television is the latest medium to go digital
Smart and connected TVs are entering homes around the world at an exponential rate of growth, and streaming platform apps are increasingly replacing linear TV. You probably know at least a few people in your life who are among the 84.3 million “cord cutters” in the United States (yourself maybe included). This digital transformation mirrors that of the media.
But many advertisers learn nothing from the “difficult years” of digital advertising. In other words, advertisers moving from linear TV to CTV aren’t listening to their digital advertising experts and using those hard-earned lessons.
From the beginning, TV advertising dollars have traditionally been allocated among networks based primarily on the demographics of the shows’ viewers from panel data.
The most savvy advertisers will learn to use the connected nature of CTV devices to better understand and reach their best audiences.
Today, advertisers are trying to replicate this way of working with TV networks with streaming services like Hulu, Peacock and others. Streaming services offer demographic information and even targeting capabilities to advertisers, who then allocate certain amounts of their campaign budgets to each platform, either through network purchases (e.g. invest 100 million dollars in Hulu broadly, targeting a specific demographic) or specific show purchases (e.g. investing $50,000 in advertising during one show and $50,000 for another).
These methods are still quite contextual or based on the individual’s view of that streaming platform, which cannot be reconciled with the same view on another streaming platform.
This way of advertising CTV does not take advantage of all the new benefits that CTV can bring to advertising when purchased programmatically, such as recognizing the same household members or individuals across devices and content platforms. This is essential if you want to maximize your reach or just make sure you have control over the frequency of your ads. Not to mention the ability to look at your CTV media purchases in the context of your display, online video and audio purchases.
The most savvy advertisers will learn from the aforementioned clumsy adolescence of digital advertising and use the connected nature of CTV devices to better understand and reach their best audiences. Advertisers who simply do a one-to-one translation between traditional linear TV advertising and CTV advertising will fall behind.
Programmatic is needed to get it right
Here are a few reasons why truly connected programmatic advertising is critical to the success of CTV advertising.
Recognize the same household members on all devices: A single CTV platform (eg Hulu, Peacock, YouTube TV, Amazon Prime Video) only sees its own subscriber base. What if someone subscribes to all of these platforms and hops between them every day on multiple devices (a Roku, multiple different Apple TVs, a Samsung Smart TV, a Nintendo Switch)?
This means that if the same advertiser buys on each of these platforms individually, they could waste buckets of ad spend by oversaturating a family with the same ads over and over, beyond the point of diminishing returns because the advertiser doesn’t not recognize them when they’re on different content platforms and devices. With a better knowledge of each individual thanks to the connected identity, the risk of oversaturation is a thing of the past.
Inventory Fragmentation: About 47% of advertisers agree that inventory fragmentation is a huge problem with CTV, the second most important issue marketers face after accurate measurement.
With CTV, the problem of inventory fragmentation is particularly difficult: there are publishers, platforms, and then devices in between. If an advertiser makes direct purchases with all of them, they may appear multiple times in the same program.
For example, let’s say you’re watching “This Is Us” on Hulu on your Roku TV. NBC will control some ad slots, Hulu will control some, and Roku will control some. Since all of these platforms and vendors are siled from each other, marketers cannot track how many times they show an ad to just one person.
In numbers, this is a very big deal: on average, publisher campaigns will have a 32% duplication rate in CTV due to inventory fragmentation.
But if you purchase each of these inventory sources programmatically, you have a holistic view of your purchase and can set frequency checks.
CTV media buys as part of your comprehensive media plan: You should not purchase CTV media without contextualizing it with your media plan among CTV providers and your total digital media spend. This not only includes your reach goals, but also your ROAS goals. Without a connection to your broader media efforts, it simply won’t be properly optimized and will create wasted advertising and disconnected consumer experiences.
Pass the difficult years and start with the connected identity
Just as today’s digital advertising, based on accurate and secure identity, connects individuals to all of their non-TV devices, the same principles can be applied to individuals and households with CTV devices. TV advertisers can – and should – capitalize on the tough years of digital media, moving directly from direct ad buys with each platform to a strategy that optimizes each ad buy for the individual or household.
And the advantages are many; this approach allows for maximum reach, precise frequency management, accurate metering and better experiences for viewers of CTV commercials. A connected identification strategy allows advertisers to start with 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?