Connected TV: A Hero Is Rising

“On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Brett Wilson, vice president at Adobe Advertising Cloud.

From Achilles to Hercules to Wonder Woman, many classic mythical figures and comic book superheroes are the offspring of a deity and a mortal. These characters are unique in that they have powers beyond mere mortals but also benefit from their human qualities. As a result, a common trope of classics and comics alike is a backstory filled with growing pains of a fledgling hero as they learn to embrace the best of their dual selves.

In advertising – where marketers are always on the lookout for a new “hero” format – connected TV (CTV) has the makings of just such a conflicted hero. The progeny of TV and digital, connected TV promises to combine digital’s advanced targeting, interactivity and ease of buying with TV’s storytelling power through video on a large screen.

In practice, it hasn’t been that easy. Although much ink has been spilled on connected TV’s growing pains, recent developments and new best practices are emerging to help advertisers cash in as connected TV grows up.

In many ways, connected TV is following a trajectory that is similar to other digital formats but is several years behind. Most advertisers still buy connected TV ads either manually – direct buys from over-the-top (OTT) platforms or TV networks offering content via OTT apps – or through ad networks.

Sound familiar? Both can have drawbacks. In the case of publishers, advertisers are often required to do blunt, large guaranteed buys. In the case of ad networks, they don’t always get full transparency or control over where ads run.

As publishers embrace private marketplaces to automate buys and scale, advertisers can take back control. They can get full app and screen transparency, better targeting, turn off buys and apps instantly, swap creative, do in-flight optimization and more.

But reasons for skepticism still abound and are worth considering in full.

The most common criticism of connected TV surrounds viewer experience. High frequency – both within ad breaks and full episodes – is an issue familiar to any viewer. While some of this can historically be attributed to scale, it is more often the result of server-side ad insertion disrupting the old ad call model.

Many marketers are successfully mitigating this issue not only by better managing frequency, but also by optimizing which spot they buy – first or last in the ad break, for example – or by running fewer, longer ads, such as 60-second ads. Another innovation available soon from top OTT providers is the ability to buy sequential ads within an episode, enabling deeper storytelling.

Another common reason advertisers do not buy connected TV is because of scale. That’s changing. Around one-third of Americans own and regularly stream video using a smart TV or connected device, such as an Apple TV, Amazon Fire Stick or Roku, according to Nielsen, and watch an average of 2.3 to 3.6 hours per day.

Of course, size only matters if it’s the right target – which is connected TV’s superpower. The median CTV viewer is 23 years younger than the average linear TV viewer and makes $10,000 more per year, per FreeWheel. In other words, these are often the viewers who don’t watch traditional TV or don’t see ads on traditional TV frequently enough for the ads to work.

Targeting capabilities on connected TV are also maturing, helping marketers apply data without losing scale, which is another common criticism. First-party data from OTT providers, including TV networks or device-makers like Roku, which offer their own logged-in user data to advertisers to better segment viewers, help marketers segment audiences in a way that doesn’t compromise reach.

Targeting is also getting more sophisticated. Notably, advertisers can now use their own first-party data or third-party data for CTV buys thanks to OTT providers and TV manufacturers offering deeper data integrations with buying platforms.  While there are limitations due to individual versus household targeting, advertisers are beginning to control frequency with an audience for the first time across linear and connected TV. As a result, connected TV is becoming more like addressable TV but without the high minimums or necessity of dealing with multiple cable and satellite companies across the country.

Early measurement headaches are also beginning to recede. It is standard fare for buying platforms to measure completion rates, clicks and actions. Many advertisers are also now measuring incremental reach, offline sales and brand sentiment. Nielsen, Roku and others offer additional tools for audience verification. For advertisers concerned about measuring and blocking digital ad fraud, connected TV is a relatively safe bet. While connected TV isn’t immune to fraud, since CTV viewers typically login or authenticate to access content, it’s a more marginal issue.

Finally, companies like Innovid and Brightline are making it possible to create CTV ads that are as interactive as digital. Making an ad shoppable – where a viewer can push a button on a remote to order a product – is just one example where new innovations are pushing the boundaries of what is possible.

In all, CTV offers a brand-building blend of TV and digital. While we’re are still in the early chapters of this story as both targeting and measurement mature, there is an opportunity to dive in now as this hero rises, before the story plays out.

Follow Adobe Advertising Cloud (@AdobeAdCloud) and AdExchanger (@adexchanger) on Twitter.

This post was syndicated from Ad Exchanger.