The growing importance of CTV

Much has been said about the way COVID-19 drove 10 years of ecommerce growth into just 10 months. But COVID-19 had a significant impact on many aspects of the economy, marketing and advertising included.

Take television advertising. Digital TV viewing shot up, and advertisers strove to meet them there. But rather than make big bets on the annual Upfronts, where marketers purchase huge and costly inventory buys, advertisers turn to programmatic buys of connected TV. The TV landscape will never be the same again.

The pandemic & TV viewing and advertising

Like all trends in digital advertising, the great shift in TV viewing is 100% driven by consumers. They decide when to watch their favorite shows, and on which device to watch them. Gone are the days when people gathered in the family room to watch appointment TV.

That trend went into hyperdrive during the pandemic. With out-of-home options constrained, the 2020 lockdowns prompted consumers to watch a lot more TV. Binge-watching entire seasons of shows became the new national pastime: digital TV viewing minutes shot up by 25% from Q1 to Q2 2020, just as lockdown orders hit..

And, in a very short period of time, the consumers were introduced to a slate of new streaming services: discovery+, Peacock, HBO Max, Paramount+, Apple TV+ and Disney+. Restless consumers added those services to their Netflix, Hulu and Amazon Prime Video subscriptions.

Within the ad-tech industry, we differentiate between linear TV, CTV, streaming and advanced TV. To the consumer, however, it’s all just TV.

Consumers weren’t the only ones who embraced CTV during the pandemic. Advertisers, unsure of where to find their viewers, migrated from linear TV to digital. CTV allowed them to test publishers, often smaller and experimental ones, measure the results, and optimize their media plan on a weekly, or even daily basis. That’s game changing.

Digital = performance campaigns

For a long time, TV was seen exclusively as a brand-awareness channel, one that can reach tens of millions of consumers in a very quick time. The challenge is that one was never quite sure if those ads were seen by the right consumers, or if those consumers took actions as a result of seeing an ad. Put another way, two cornerstones of digital advertising — measurement and attribution — were largely unavailable to TV advertisers.

But CTV obliterates those constraints. In addition to removing the pressure of placing big bets at the Upfronts, all the benefits of digital advertising — testing channels, measuring results and optimizing as spend in real time — now apply to the TV channel. And that, says TVSquared CEO Jo Kinsella, makes CTV a performance channel. There’s data to backup Kinsella’s claim: According to research Hulu and Telaria, 82% of DTC shoppers will take action after seeing an ad streamed across CTV

What’s interesting is the way in which CTV democratizes TV advertising. Smaller companies, like growing DTC brands can now get into the game. Rather than invest millions in a campaign as was once required with Broadcast TV, marketers can test the waters with a much smaller budget.

And they can use their tried and true strategies for that testing. For example, eMarketer reports that about 60% of CTV impressions are purchased via programmatic channels. That’s about $2.37 billion.

Challenges of CTV

Connected TV still faces some challenges, however. To begin, it’s a highly fragmented market. Let’s say I’m a shoe brand and I want to target women aged 25 to 45. In the pre-digital world, I’d turn to Nielsen’s who would tell me which shows or properties will allow me to reach my target audience. Today, my target audience may watch those same shows on a computer via a streaming service like Netflix, Amazon Prime, YouTube, via cable and a Smart TV, or from any one of the affiliates that distribute that show. How do I reach them at scale?

Another challenge is measurement. Sure, digital impressions are countable, but every media buyer uses a third-party measurement company to ensure the number of ads they paid for were actually delivered as promised.

Measurement is more difficult, as TV studios rely on service-side ad insertion (SSAI) for ad delivery. SSAI knits ad spots into the content of the show itself in order to thwart ad-blocking software, which works by blocking ad calls to an ad server. If the ad is integrated into the content, there is no ad call. But it also makes it difficult for advertisers to know if their ads were actually displayed, leading to a new kind of walled gardens.

That challenge is being addressed, however. In fact, over the past few years we’ve seen the rise of multiple TV consortiums that bring together all the major players in the ecosystem to tackle the challenges of CTV. After all, what’s good for the goose is good for the gander, which is why they’re working together to develop a set of standards for buying inventory, measuring campaigns and calculating attribution.

Paragon’s CTV services

We provide a full range of CTV services to clients to ensure ads are displayed correctly and meet your expectations:

• Precise QA testing of ad creatives to ensure all campaigns meet technical specs, and perform as they should on devices
• Campaign setup, including troubleshooting campaign delivery issues and providing recommended edits/changes for peak performance
• Pacing and performance reporting
• Quality check AVOD channels to ensure the content quality and ad delivery aligns with your legal guidelines and brand standards
• Partner integration support
• Exceptional account management

Get in touch

Connected TV is an exciting new channel for advertisers of all sizes. It combines all the benefits of medium – site, sound and motion – with all of the advances of digital. If you haven’t considered adding TV into your media mix before, now is a good time to start. CTV has lowered the barriers of TV advertising, allowing more brands to reach their audience in this highly engaging channel. Paragon can help you launch successful CTV campaigns. Get in touch.