The pandemic has accelerated a shift to connected TV viewing and the ability to target those audiences is becoming more sophisticated. Now the industry is poised for transformation on measurement, says TVSquared’s Darren Moore.
Although the end of third-party cookies has been postponed, preparations continue for its retirement, now scheduled for 2023. While Google has given advertisers and publishers more time to find alternative solutions and strategies that can sustain ad campaign performance, connected TV (CTV) – which never relied on cookies to begin with – is reaping the benefits of this digital uncertainty.
As the drama around cookies unfolds, advertisers are forging a new path; guiding the way towards an ecosystem driven by first-party data and privacy-conscious approaches. While its cookieless capabilities have received greater attention as of late, that’s not the only reason CTV is flourishing.
Why CTV is a rising star
No matter when the curtain falls on third-party cookies, CTV is becoming a more significant part of the media mix – and it’s not just because of industry developments. It’s because savvy advertising follows the audience – and, now more than ever, audiences are flocking to CTV platforms.
Today’s TV viewer expects control, not only of what they watch, but also when, where and how they watch. Coupled with the impact of the global pandemic, these behaviours have led audiences to adopt streaming services at a phenomenal rate. Globally, 54% of adults now frequently watch streamed TV content, and 65% of those people do so for two hours daily.
Since March 2020, brands have recognised that the TV advertising landscape has been reinvented by this trend, and media spend has shifted in response. For example, TVSquared’s recent survey of UK advertisers revealed that 90% agree ‘TV’ is now defined as both linear and streaming platforms, with 89% indicating that TV should be sold on impressions. Thanks to channels like ad-supported video on demand (AVOD), this broader definition of TV is attracting a greater portion of ad budgets. AVOD expenditure alone is expected to more than double between 2019 and 2025, reaching $66 billion across 138 countries.
TVSquared’s survey also evidenced UK advertisers’ growing commitment to CTV as part of their media mix. A third of respondents said they currently allocate between 16-25% of their total TV budget to CTV, and almost half (45%) are running CTV campaigns across three-to-five platforms. Moreover, 35% indicated they will advertise on six or more in 2022 – proof of CTV’s continuing growth as part of advertising strategies.
Clean rooms: Behind the scenes
As advertisers follow their audiences, media partners capable of delivering effective ad targeting have become more valuable. Personalisation in the CTV landscape is made possible with device and advertising IDs based on proprietary, or first-party, data. Viewers’ trust in TV as a medium makes CTV both rich in data and a source of premium inventory.
Data clean-rooms are allowing first-party data to be shared without compromising user privacy, creating value for both brands and consumers. Instead of a third-party combining two separate data sets, an expensive process prone to error, clean rooms now enable two parties – for instance a brand and media partner – to enter a safe environment where they can put down parameters for what they want to share.
Despite consolidation in the industry accelerating progress in this space, CTV is not immune to every data sharing challenge. There are often different restrictions around who has access to different information, leading to data disparity. The quality and quantity of first-party data by itself won’t be enough to build robust targeting capabilities for many advertisers.
The award for contextual goes to TV
To truly engage viewers, advertisers require additional points of data intelligence, such as context. TV advertising has always been contextual, but the industry’s approach has grown more sophisticated. No longer as simple as airing an ad for a food delivery service on a food-oriented channel or network, contextual targeting solutions can now process and analyse individual pieces of TV content, collating information on topic and genre to inform advertising strategies.
This need for additional data points is well illustrated by the KPIs advertisers require from their CTV campaigns. The top three were optimising reach (49%), optimising frequency (42%) and incremental reach (40%), but key requirements among advertisers also included ability to measure performance accurately at scale and transparency of metrics.
American TV networks and AVOD services are the frontrunners in this space, but with ad tech players such as Xandr rolling out contextual targeting tools for CTV inventory, the infrastructure to support it is strengthening. For audiences, this will lead to a seamless, quality viewing experience – and it’s this, in both content and advertising, that continues to attract so many consumers to CTV.
So, how did you like the show?
The complexity of cross-platform TV measurement is often underappreciated, but ad campaigns encompass multiple networks and platforms – this means data must be collated from linear, over-the-top (OTT) and CTV sources, before it’s harmonised to provide advertisers with a fast, accurate overview of performance. This is no small task, given that many of these channels are walled gardens. Legacy solutions can’t deliver on advertisers’ current needs, meaning TV measurement must evolve to meet them.
With attribution and measurement solutions attracting significant investor interest – amounting to USD$4.6bn in Q1 2021 – the industry is primed for a transformation. The leading tools for monitoring advertising performance will be the ones that can measure TV how people watch it – across time, platforms and devices.
The impending demise of third-party cookies might be prompting more advertisers to investigate CTV’s opportunities, but it’s not the primary reason behind this change. Eyeballs are now glued to CTV services, and brands are creating demand for stronger advertising capabilities, and demanding proof of performance in return. To ensure they can take full advantage of CTV, advertisers must adopt solutions that address issues with data disparity and provide advanced measurement tools for campaign performance.