Why is connected TV so hard? | WARC | The Feed

Why is connected TV so hard?

Connected TV is a rich area of advertising delivery that once promised online ad addressability with linear TV’s quality and big screen, but between the complexity of buying to the difficulty of creating an unobtrusive advertising break, CTV is tough but is improving, Advertising Week Europe heard.

Why it matters

There’s a plethora of on-demand video services now available, from broadcaster video-on-demand, subscription video-on-demand, to free ad-supported streaming television (FAST). CTV is a suite of different technologies that is pretty good for the consumer of television who has never had this much choice of programming and subscription, or advertising-supported plans.

However, for the providers that run the platforms to the media buyers dealing with ever more fragmentation, the complexity doesn’t end. And this is partly because the linear TV infrastructure and expertise is so strong that matching these capabilities in connected TV is tough, explains Katie Coteman, GVP and head of advertising and partnerships for the UK and Ireland at the recently merged Warner Bros Discovery.

Warner Brothers Discovery

Scale is at the core of the questions now surrounding this advertising technique, and being at the top of the pile – as much in terms of producing original material as building advertising infrastructure – is vital.

This, explains Coteman, was the logic behind the recent Warner/Discovery merger: “We kind of see the whole streaming industry consolidating over time,” and the merged company wants to be one of the top three. It aims to do this via HBO Max, an ad-supported subscription service.

“We have a lot of ambition in this area,” she adds, but “it’s quite complex; it’s incredibly fragmented.” The way to win, the company believes, is not to have lots of different products – further muddying the water – but to have one “really premium product”.

Market dynamics

More budget, but not yet where it wants to be, especially in the realm of measurement.

“Definitely, there is more budget. And that budget is coming from a variety of different places,” says Coteman, different agencies, different clients, whose budgets are coming to CTV from digital and social spend in a search for reach, as well as some repurposed linear spend and even some first-time TV advertisers.

The recent move by BARB to include TV-fit content in its measurement TV has helped shift the advertising conversation, even if this also serves to underscore how much more blurred the line is among consumers compared to industry watchers. But measurement remains a significant issue, with frequency and audience measurement.

Scale, too, is tough to find and the shift to connected TV devices has made that task harder for the publishers who must now appeal to audiences via a smart TV app rather than a channel to stumble upon – especially when these publishers need to spend so heavily on content.

Access and format

Warner Brothers Discovery sells much of its inventory programmatically, the technique being an increasingly agreed standard for how agencies want to trade. Some quality control stems from higher CPMs.

• While most slots go to regular TV ads, there are opportunities to move into something less like TV, Coteman believes, and posits the use of a pre-roll 90-second format before showing the content ad-free.
• QR codes, now mainstream thanks to the pandemic, are not likely to come to TV advertising, even on CTV – or at least “I really hope not” – however, there are opportunities to activate brand-building ads through pause-screen advertising, which is a significant new opportunity that could open up a sales opportunity.
• Emulating the linear model – sustained as it is by decades of sophistication and expertise – is incredibly tough.

“I’m so glad I’m not a media agency buyer now,” concludes Coteman. 

SVP reporting at Advertising Week Europe