The recent launch of advertising-supported tiers by Netflix and Disney+, along with consumers’ continuing shift to streaming online video through their TVs, has attached large expectations to Connected TV (CTV). Indeed, the spread of CTV devices to 66% of UK homes points to this rapidly developing channel having a major impact on marketers’ priorities in the coming years.
In addition, with IAB UK recently forecasting UK CTV ad spend to double by 2026 to £2.3bn, it is understandable why CTV is regarded as the next frontier of digital advertising.
A future advertising goldmine
CTV delivers incremental reach and targeting for advertisers, while also offering access to a TV experience at scale, with more flexibility and with lower minimum spend than linear TV. However, while it offers much promise, one key obstacle stands in the way of CTV becoming the future goldmine that the IAB’s forecasting suggests. As a relatively new technology and media platform, it noticeably lags behind other media channels in delivering the performance insights advertisers are increasingly demanding. This inability to prove return on ad spend by effectively gauging consumers’ reactions on viewing an ad makes it tough for marketers to justify long-term budget allocation to CTV.
Measurement is falling short
The good news is that there is clearly a desire to drive better measurement. In January, a Joint Industry Committee (JIC) was launched between U.S. media giants Fox, NBCUniversal, Paramount, TelevisaUnivision and Warner Bros. The purpose of JIC is to vet and certify the dizzying array of audience-measurement technologies that continue to emerge into the market. Meanwhile, Netflix’s decision to join the UK’s Broadcasters Audience Research Board (BARB) provides more evidence of the maturing of CTV, and the direction the market is heading.
The message from Netflix, that it intends to make its ad offering measurable, is admirable. The channel will be able to draw on its vast subscription data to offer precise, personalised and targeted advertising. BARB, meanwhile, is sure to prove useful in measuring who is watching, who they’re watching with, what they’re watching, and how and when. However, this does not hide the fact that currently, both the JIC and Netflix fall far short of what advertisers are accustomed to on digital channels: insight into what consumers do after viewing an ad.
In search of addressability
In a boost for CTV, one of the answers lies in the treasure trove of subscription data that channels like Netflix are built on. For many streaming services, accessing the streamers’ programming hinges on logging in with an email address or other personal information – meaning that user bases are 100% logged-in and addressable, and streamers are able to accurately understand their consumers, and how and when to reach them.
Harnessing this data in the right way, with the right technology, streamers could create highly personalised, consented ads that are served to the right consumers at the right time. This helps to elevate CTV advertising to the granularity that other channels enjoy – making it easier for brands to effectively address audiences at scale.
Going beyond reach
Leveraging addressability and people-based marketing helps marketers to accurately track and attribute conversions to specific advertisements and destinations. Pairing this with advancements in data collaboration, marketers can resolve sophisticated business insights, such as whether a consumer watching a CTV ad drove the purchase of a product with a partnered retailer. By developing visibility into the business outcomes that matter the most, marketers can better understand the impact of their campaigns, and make data-driven decisions for future campaigns.
For longer established UK broadcasters, measurement is not new, and large customer data sets ‘matching’ to conversion data from partners and clients has already begun. The questions for many advertisers will be: 1) Is the measurement consistent? and 2) Does it work with our own frameworks, or will a fragmented measurement ecosystem join an increasingly fragmented targeting ecosystem?
Going beyond reach to prove outcomes should be on the agenda for every TV player/platform. Making that measurement consistent across all TV and Video should be on the agenda for all advertisers, in order to keep TV, often the best performing part of the plan, at the centre of their marketing.
Justifying the hype
CTV is approaching a pivotal moment. It can only live up to its current label as the next frontier of advertising and the IAB’s forecast by harnessing the technologies that will enable marketers to quantify ad performance.
If advertisers cannot engage in people-based marketing on CTV with the same precision as other channels, brands are likely to prioritise other channels where they can gauge their ad spend with greater precision. However, if CTV integrates technology that enables measurement and attribution, it will give advertisers the evidence they need to justify spend, and in doing so, provide them with better returns than ever before.