By Hunain Khan, Director – Programmatic CTV supply, Xandr
In terms of television viewership globally, the direction of travel has been clear for the past few years: viewers, particularly younger viewers, have shifted away from linear TV toward Connected TV (CTV) and streaming platforms in huge numbers.
In the UK for example, media regulator Ofcom released research recently which revealed that young adults are watching seven times less broadcast TV than those aged 65+. Meanwhile in the US, Nielsen recently reported that streaming viewership exceeded cable usage for the first time, with the average volume of streamed content being consumed easily surpassing the record totals reached during the pandemic lockdown period of 2020.
As a result, advertisers are allocating more money towards CTV and streaming channels than ever before. While CTV ad spend remains behind linear TV, the gap is getting smaller. In fact, The Establishment Survey – an annual report from BARB – shows that the number of UK homes with access to an SVOD has reached 19.57 million in Q1 2022. This figure represents 68.5% of UK households and an increase of close to 500,000 homes since the previous quarter.
On paper, it’s easy to see why advertisers are attracted to CTV as a marketing channel: it allows them to target specific segmented audiences and leverage the power and credibility of powerful, premium TV environments, while reducing wastage associated with linear TV buys. However, in reality, getting to grips with CTV is not always straightforward for brand advertisers to buy or for publishers to sell. The CTV industry is still relatively young and, as a result, both parties can encounter a variety of potential complications in planning and executing CTV campaigns.
Eyes on the US experience
The US is currently the most mature market for CTV advertising, so offers a valuable insight into how the market might develop across the world. While broadcasting and advertising regulations vary from country to country, it is already clear that, for advertisers, CTV is a fragmented marketplace for advertisers, both locally and globally.
In the US, this fragmentation manifests in an overwhelming number of places to buy CTV inventory, and a lot of ways to buy the same inventory, meaning buyers are facing various layers of complexity in their decision-making. To reach an audience through CTV advertising, a buyer must first navigate the content owner or broadcaster, multichannel video programming distributor (MVPD) and device manufacturer carriage agreements. Buyers must contend with a multitude of different supply paths to each publisher, some of which are more efficient than others. Ultimately, navigating the fragmented CTV supply landscape requires time, resources, and expertise.
And as the domestic CTV market continues to expand and evolve, UK advertisers are beginning to encounter similar examples of fragmentation, competition and complexity.
Due to this complex environment, some programmatic tech platforms have been developing solutions to help ease the sales process of CTV advertising for both buyers and sellers alike. One solution that is being adopted widely is curation technology. Buyers can leverage a self-service tool to access thousands of pre-negotiated video and CTV deals across hundreds of premium supply partners. They can then layer in targeting and data to create customised buys in an always-on environment. This is an easy-to-use solution that gives buyers direct access to all available CTV inventory, helping ensure there are no missed opportunities to reach their target audience.
New opportunities through collaboration
With looming economic uncertainties across the globe, many households that currently pay for multiple subscription TV services may choose to streamline their paid content providers. In this scenario, free-to-view AVOD services are well-positioned to pick up new viewers. As content gets further fragmented among new platforms and subscription prices rise, the shift to AVOD is likely because consumers will look for lower-tiered options to access their favourite shows and movies.
For publishers to fully capitalise on this opportunity, they must ensure that various measures are in place in order to satisfy the demands of both advertisers and viewers. CTV inventory is usually purchased programmatically within an auction, rather than booked weeks in advance like linear TV ads, meaning that publishers need to build in real-time features including ‘ad podding’ (which sequences a group of ads to play back-to-back); ‘audio normalisation’ (which ensures that the audio track of different ads are played at a consistent volume); and ‘competitive separation’ (which makes sure that competing brands don’t appear back-to-back).
With traditional TV advertising budgets and digital marketing spending under closer scrutiny than ever, CTV and AVOD publishers have a real opportunity to establish themselves as attractive and effective media partners for brand advertisers. However, it pays to remember that the CTV advertising market is still a relatively young one and to keep user experience (for both advertisers and viewers) front-of-mind at all times.
Now is the time for advertisers and publishers to start figuring out the role of CTV in their plans and work together with trusted ad tech partners to help them ‘test and learn’ their way to success.
