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    Research Digest

    Top Challenges Faced by Advertisers Amid CTV’s Growth

    Abstract

    • Almost half (48%) of advertisers cite measuring incremental reach as their top challenge as they navigate the Connected TV landscape.
    • More than half (57%) of advertisers say improvements to cookieless measurement in an adtech solution would create the most value for them.
    • Cross-platform measurement, data compliance and measurement standardization were equally weighted as other key concerns.

    Measurement, frequency and walled gardens remain a key concern for advertisers. 

    The Connected TV growth spurt has not been without its growing pains, as advertisers navigate new terrain. However, with growth comes opportunity. This article will explore the common pain points facing advertisers right now, and how they can overcome these challenges.

    Unlocking the Keys to Incrementality on Television

    Incremental reach measures the unique audience that is exposed to a Connected TV campaign, in addition to the audience reached on other marketing channels. Below is an example of a hypothetical campaign which reached 200 million viewers aged 25-34. Of those 200 million viewers, 50 million viewed the campaign on linear TV and 150 viewed the campaign on Connected TV. Twenty million viewers saw campaigns on both platforms. This means advertisers reached 130 million more viewers on Connected TV.

    A research paper released by WARC¹ found that ACR-data, which measures when a brand buys inventory from a Smart TV provider (e.g. LG, Samsung or Vizio) and monitors programming and ad viewing behavior, can be used to measure incremental reach across different TV media, and the cost-effectiveness of these campaigns. Advertisers will be able to glean insight on who is exposed to an ad, and the ad frequency, and use this intel to optimize their budget and strategy.

    That said, there is a near certainty more methods to gauge incremental reach for Connected TV campaigns are on the horizon. With it being a top of mind challenge for many marketers, expect to see more solutions rolled out over the coming months and years.

    Connected TV and Cookieless Measurement Go Hand in Hand

    A 2022 North America Quantcast State-of-the-Industry Report of over 600 advertising and publishing professionals revealed that over half (57%) of respondents will be leaning more on their first-party data, 38% favor a contextual approach (this means placing ads alongside relevant content, for example pairing with top-tier publishers or networks that are brand safe and aligned with their audience) and 36% think a mix of first-party data, contextual targeting and industry IDs is an appropriate solution.

    Ultimately, Connected TV wins the cookieless and contextual war, simply due to its format. A separate WARC study³ explained that contextual targeting solutions can now process and analyze individual pieces of TV content, collating information on topic and genre to inform advertising strategies.

    Additionally, Connected TV ad platforms have risen to the challenges and made it easier to deliver effective ad targeting, without having to rely on cookies. For example, allowing marketers not only to segment their audience, but provide a breakdown of which segments are performing. From a personalization standpoint, CTV relies on device and advertising IDs, first-party data, and data clean-rooms that allow that data to be shared without compromising user privacy and supporting a safer environment for both brands and the consumers they target.

    Last Year’s Challenges of Measurement and Compliance Stay Sticky

    According to Statista survey data⁴, last year’s concerns continued to plague advertisers this year. Overall, these concerns remained on par with one another, with 41% of respondents finding it difficult to identify audiences across multiple screens, and 39% citing a lack of standardization when measuring cross-channel performance.

    Although CTV’s increasing penetration is clear (the Interactive Advertising Bureau (IAB) predicts it will hit 36% of time spent by the end of this year), it’s still in its infancy compared to other more mature  platforms like search and display. But, there are wheels set in motion to get it to that point. The IAB announced ad format guidelines⁵ for Connected TV, which helps to minimize the fragmentation of ad formats, enact technical standards and scale both buy- and sell-side with programmatic, among others. 

    From a data compliance perspective, the CCPA and GDPR do not explicitly address Connected TV or OTT streaming, but data concerns can be mitigated depending on the media partner or adtech platform, and choosing to partner with premium, brand safe inventory. As consumer adoption on Connected TV increases, we can expect to see more regulations and updates that will address privacy and compliance.

    Conclusion

    Incrementality, data compliance and standardization are some of the major concerns faced by advertisers amid Connected TV’s growth, and have remained top of mind over the past year or so. However, the industry has taken note and has started to implement some level of standardization. Thankfully, the very nature of Connected TV makes it easier for marketers to navigate this ‘cookieless’ world, through targeting (and reporting) on an audience segment level, ways to measure incremental reach, and relying on first-party data or contextual targeting to reach the right audiences.

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