When it comes to digital content consumption patterns, the times they are a-changin’ (even before the pandemic). COVID-19 has injected a new variable into the mix. By 2022, U.S. viewers will spend two hours and 10 minutes per day engaging with digital video, according to eMarketer, and the lion’s share of viewership gains will come from connected devices like CTVs and game consoles. This, coupled with the pandemic and its aftereffects, have important implications for those who monetize TV inventory, both linear and digital.
One of the most glaring impacts of the pandemic is the temporary elimination of tentpole events and live sports, which often represent significant buys in marketers’ linear TV plans. Such events were rendered instantly irrelevant by COVID-19, and will remain so even as the nation navigates various phases of reopening the economy. Crowd-driven events are likely to be deferred at least into 2021, possibly later. Analysts at UBS speculate that “the lack of sports will push us much deeper into uncharted territory” in terms of TV viewership patterns.
Consultancies, agencies, and other parties buying media on behalf of end brands need to have frank discussions with their clients regarding CTV’s broadening role in this new media ecosystem. According to an IAB study, 35% of buy-side decision-makers are adjusting their in-market tactics and anticipate increasing their OTT/CTV investment for the March-June period as a result of COVID-19.
The most notable similarity between linear TV and CTV is the high-impact format they share, which is not intended to prompt immediate viewer action, per universally accepted media planning standards. From an execution standpoint, however, CTV differs in important ways. Among the benefits it offers are:
- More sophisticated audience targeting capabilities than linear TV.
- Unique creative strategies like sequential messaging, call-to-action (e.g., a viewer prompt on Amazon Fire TV to use Alexa to add an item to their shopping cart), and interactivity within the ad unit.
- Lower CPMs, especially when choices are limited in “use it or lose it” scenarios that emerge when linear TV budgets must be reallocated because of unforeseen developments. CTV is inherently less expensive than linear TV, with COVID driving prices even lower. Tatari, a tech firm that helps media companies and brands measure and optimize ad campaigns, reports that CTV CPMs have been discounted by an average of 30 to 40% during the pandemic.
- Fluid budgets and the freedom to test. Budget fluidity has always been an advantage of digital media, especially programmatic. As Adweek put it, “The cancellation of the upfront can be liberating.”
- Access to more comprehensive and insightful measurement options. Depending on the technology involved, some on-site actions can be directly attributed to CTV buys via pixels and/or third-party measurement partners integrated with the platforms.
Measurement is an important topic in this discussion, and it bumps up against a widely held misassumption on the part of marketers. Because CTV’s targeting and creative capabilities are similar to those used in always-on, real-time-bidding remarketing campaigns, marketers assume their performance expectations for CTV should mirror those for direct response. If remarketing performs best, why shouldn’t all the budget go there?
Overlooked in that assumption is the interaction between upper-funnel and lower-funnel messaging and objectives. Upper-funnel messaging contributes to conversions that ultimately take place in the lower funnel, but how can you prove to advertisers that CTV is actually driving users down the funnel?
The best way for publishers and tech providers to address this issue is by making sure they have a deep understanding of their clients’ key measurement requirements at the outset of any engagement. If equating digital metrics to linear metrics purely for GRPs is all that’s required, then Nielsen represents a simple approach that will work for most DSPs.
However, as marketers—often prodded by their media-buying partners—become increasingly digitally savvy, more are embracing sophisticated tools that maximize their ability to capitalize on the platform fees they’re paying whenever it makes sense to glean actionable insights from the data.
For example, if a marketer needs to incorporate offline measurement, can they utilize a full-stack solution? If deduplicated reach is the most important factor, a tech stack with linear TV data for closed-loop attribution might make more sense.
And no conversation about measurement in the CTV ecosystem is complete without some discussion of fraud. Digital buyers know that each technological advancement in this space opens the door for a new “Wild West” environment. It was mobile in the early 2010s, then programmatic. At the start of the 2020s, it’s CTV.
A case in point is the “Monarch” ad fraud scheme, which targets Roku apps. Regarding Monarch, Jalal Nasir, CEO of Pixalate, told Adweek that “connected TV also lacks measurement guidelines, technology and experience… The opaque supply chain and high CPMs make CTV a breeding ground for fraudsters to exploit.” Pixalate estimated the monetary scope of the fraud to be “at least a seven-figure amount.”
Clearly, fraud prevention and measurement options are two areas where it is imperative that anyone involved in CTV buying stays well-informed.
The media buying landscape will look quite different through and after the COVID-19 era. Future success will require those on the tech and supply side to partner with advertisers and media buyers and to stay in lockstep on three important issues:
- Refunds for fraudulent activity.
- Consistent utilization of third-party verification as these solutions continue to evolve.
- Solutions that enable marketers to reach their target audience and measure incremental reach and/or other KPIs.
No doubt, the times will keep on changing in the media world, but the players that have the best chance of building relationships and ultimately staying in the mix for brands will be those that align with these important issues.
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