Setting Advanced TV’s 2020 Vision
Hindsight may be 20/20, but with data and in-depth knowledge, we can make some pretty solid predictions about the future of Advanced TV in the coming year.
Let’s start with the obvious and follow the money. Advanced TV ad spend will continue to grow as more audiences shift from linear TV to over-the-top and connected TV — and advertisers will adjust their media spend accordingly. Whereas TV ad spend has peaked, digital video is growing at a fast clip. According to eMarketer, U.S. digital video ad spend will grow by 82% from 2018 to 2022, compared to a decline of 2.5% for U.S. TV ad spend over the same time period. But what’s the story behind the numbers?
For advertisers, the growing Advanced TV market will continue to reap benefits in terms of new tools, capabilities and strategies. Custom creative, precision targeting, advanced measurement and attribution solutions will all improve in the coming year as advertisers become more familiar with Advanced TV. In fact, advertisers will unlock new use cases for the medium in 2020. Brands will increasingly support lower-funnel ad campaigns that link Advanced TV advertising to business metrics such as lifts in sales, foot traffic, website visits and signups. As a result, advertisers will now embrace Advanced TV as a full-funnel medium.
Advertisers will also leverage Advanced TV as an increasingly viable option for regional and local engagement. According to a recent survey, half of local ad buyers allocated budget toward Advanced TV this year, and we expect this to continually increase due to the location-based targeting options available through Advanced TV.
Seas of Change
Of course, 2020 will also see rapid changes on the consumer side of the television business — thanks to an explosion in streaming options. As The New York Times recently pointed out, there are 271 online video services available in the U.S. Meanwhile, new quality streaming services like Disney+, Apple TV+ and Peacock will rival traditional broadcasters and established streaming services like Netflix, Hulu, Amazon and YouTube TV. On one hand, consumers have never had so many choices. On the other hand, the mounting costs of various OTT subscriptions will make it harder to justify cable and, in all likelihood, further contribute to cord-cutting. But as a recent eMarketer study points out, the future of television won’t be about pitting a subscription model against an ad-supported one — it’ll see robust growth for both models.
Naturally, this mixed model environment will also present challenges for advertisers. One obvious challenge is that audiences will continue to fragment. As fragmentation accelerates, Advanced TV will play an increasingly important role for advertisers looking to locate hard-to-reach audiences. An IAB report revealed that delivering hard-to-reach audiences is the No. 1 reason advertisers are turning to Advanced TV, ahead of campaign optimization and increased ad relevance. So, while Advanced TV might have been optional in previous years, it’ll be imperative for advertisers going forward. Because even if the objective is simply to address the gaps in linear buying, advertisers will need to dig into Advanced TV tactics such as using actual 1:1 linear TV viewership data to qualify audiences as well as automatic content recognition (ACR) and retargeting to drive incremental reach.
At the same time, advertisers also have to overcome a different fragmentation challenge. Because there are so many platforms that aren’t talking to each other, advertisers continue to struggle to measure true reach and understand effectiveness. This isn’t likely to go away in 2020. In fact, it’s akin to the challenges we saw early on in digital and mobile. Hopefully, advertisers will use the pain points of 2020 to push for greater standardization across the platforms.
Fraud Is a Stumbling Block
Another challenge on the horizon is fraud. Earlier this year, AdLedger, a nonprofit consortium that uses blockchain and cryptography to fight fraud, found that 18% of ad requests for OTT inventory are fraudulent. AdLedger executive director Christiana Cacciapuoti told The Drum, “The mechanisms for buying OTT are very different than the mechanisms you would use to buy linear, and they much more closely mirror digital than linear. A lot of the same fraud schemes are present in OTT that there are in digital, but with a slightly different twist to accommodate for the differences in platform.”
Advertisers should combat fraud in the Advanced TV space in the same way they fight digital fraud. A good place to start is to talk with your partners in order to learn about what they’re doing to combat fraud. Equally important, advertisers should look for partners and verification firms that let them look under the hood of their tech. Because if the tech isn’t purpose-built for the TV environment, it won’t be effective.
Despite the challenges of fraud and fragmentation, 2020 promises to be a successful year for Advanced TV. The question is no longer whether or not advertisers will use Advanced TV, but how will they use it. One day, we may look back on 2020 as the year Advanced TV came into its own and if that’s the case, it’ll be because advertisers leaned into the opportunities of Advanced TV and asked good questions about new capabilities, tools and strategies.
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By Jens Koerner