Why the second half of this year will be a turning point for smart advertising
By Field Garthwaite, CEO, IRIS.TV
The CTV landscape shook dramatically in April when Netflix announced that it was exploring new ad-supported pricing tiers. Netflix’s entrance into the advertising video-on-demand (AVOD) market will change the game for brands and marketers, providing a sudden new channel to reach millions of premium audience members across the U.S. and the world. The Netflix news is only the latest event in AVOD’s steady ascent, as eMarketer recently reported that AVOD viewers will comprise nearly 60% of all CTV video service users by the end of 2022.
At the same time, CTV will play more and more of a leading role in the way brands reach their audiences—ever more apparent as the upfronts are unfolding this year. According to a recent report from the Interactive Advertising Bureau, ad spending on CTV is expected to eclipse $21 billion in 2022 — a year-over-year increase of 39%. However, this increase in spending has not yet been matched by an increase in efficiency, which is a worrisome flag. Despite the platform’s significance, CTV viewers are regularly subjected to repetitive ads, poor targeting and even inappropriate content and context—all leading to a compromised user experience.
With brands opening up their wallets and committing billions to CTV, the marketplace cannot afford to compromise user experience any longer. The current streaming landscape is defined by fragmentation and competition and poor advertising leads directly to poor user experiences and worse: increased churn and shrinking audiences.
The Problems With CTV Advertising
Today’s marketers are challenged by the combination of a sprawling CTV landscape and a lack of transparency across multiple platforms. A lack of video data means that marketers have no visibility into how their advertisements are being deployed across multiple services and devices, leading to scenarios in which a viewer may be served the same spot multiple times per day across their favorite three or four AVOD services. And with no single platform offering enough premium content to meet the needs of most viewers, advertisers must maintain a multichannel strategy to avoid missing out on key targets.
The ultimate goal for marketers is to be able to buy CTV spots in the same way they make traditional linear ad buys. To conduct effective campaigns, marketers need to be confident in the audience they’re reaching, the frequency with which their advertisement is being played and the context in which it’s being deployed. However, the black boxes of AVOD CTV services make it nearly impossible to achieve these goals.
With more buying and selling underway and CTV suddenly taking center stage, the advertising industry must refine planning, purchasing and delivering ads on AVOD services. The solution lies in drilling down beyond individual platforms and focusing instead on video data, an obvious piece of the puzzle that has been overlooked for too long.
Solving the nagging challenges of CTV advertising benefits all parties: the marketers who are able to better achieve their objectives; the AVOD services which are able to drive more value on their platforms; and, arguably most importantly, the end viewer, who is finally able to comfortably enjoy relevant and deduplicated advertising. Video data makes it possible for advertisers to achieve the same level of information and understanding that they expect from linear TV, offering crucial context into how their spots are being deployed across every AVOD service in their campaign. And as a result, the users can benefit from the same experience they have come to expect from linear TV too.
Increased demand for video data will also see a parallel need for data connectivity, providing the path to scale the use of this data across the buy and sell sides. By removing barriers and creating new gateways for all parties in the advertising marketplace, this video-first approach can introduce the transparency needed to maximize returns and optimize user experience.
With more activity than ever in the CTV marketplace, service providers and marketers alike must move quickly to ensure that they’re making the most out of AVOD’s golden moment. User experience is vital and those who choose to ignore it will find themselves with shrinking audiences—a death knell for services for whom audiences are their currency.