During a panel discussion at Connected TV World Summit last month, Katie Coteman, Head of Ad Sales at Warner Bros. Discovery UK & Ireland, argued that it is difficult for brands to build scale through targeted CTV ads.
She said: “Unless you are a very specific advertiser, you can’t build scale [through targeted CTV campaigns]. We have got to collaborate more. If you are a big brand advertiser, you’ll be using this as reach extension…and that comes back to needing centralised measurement, and being able to buy from one point in the same way across all different sources.”
She also believes that the costs associated with buying addressable spots on quality CTV inventory is a large barrier for some mass market brands. Coteman elaborated: “Why some mass market brands haven’t been leaping on the CTV bandwagon is about CPMs and CPTs – on [linear] TV, historically, they’ve been paying quite reasonable CPTs. Quality CTV inventory is much higher priced.”
Coteman was joined on the panel by Chris Edwards, Director of Business Development – EMEA at Rakuten Advertising, Paul Gubbins, VP of CTV Strategy, Publica, and Jaidev Kakar, Director of Advertising Solutions, CTV & OTT at PubMatic.
Gubbins argued that when search and discoverability functions for the AVOD/FAST space improve, viewers will spend more time within that ecosystem: “That’s when we get inventory liquidity and that’s when we start to get to a particular point around scale when it becomes really attractive for those big linear advertisers to transition from those traditional environments into addressable environments.”
Kakar said the low cost of programmatic buying has opened up space for certain direct-to-consumer and local brands to advertise on connected TV. He said: “We’re seeing studies which show – probably because of the type of content or audience or because they have more local reach – that when [these DTC and local brands] buy with broadcasters there’s more mass, but there always seems to be around six times greater ROI through programmatic than linear.”
He suggested that smaller brands may be better positioned to see their ROI from advertising on CTV while larger brands will find it more difficult, needing to conduct more econometric modelling to see the effect of advertising on the platform.
Agreeing with Coteman about the challenge posed to CTV by measurement, Gubbins noted that brands are struggling to measure their reach holistically across a growing number of AVOD and FAST services. In particular, he believes ‘legacy’ linear advertisers may only now be starting to test advertising on BVOD and only because they can still apply traditional TV measurement practices in that environment.
While Gubbins does not believe there is adequate cross-platform measurement yet, he thinks initiatives such as C-flight and Project Origin can help advertisers try to understand incremental reach, attribution and frequency management when they plan and buy in TV environments.
Gubbins goes on to predict that measurement for CTV will differ from measuring traditional linear. He remarked: “Traditional TV has taken a panel-based approach to measurement. With the evolution of addressable TV and connected TVs that are plugged into the internet, it’s now more about impression-level measurement. The way we’ve historically measured for traditional TV may not be the way we do it moving forward because fundamentally – while it’s still a big screen TV in people’s living rooms – the delivery mechanism is very different to what it was maybe 15-20 years ago.”
Edwards registered his belief that there will be a universal approach to CTV measurement which the trade consolidates around, but there may be a long way to go before this is achieved.
Another issue which the panelists believed was important to support further monetisation of free connected TV, is achieving a “linear-like” quality to ad breaks in the AVOD/FAST space.
Coteman described broadcast linear ad breaks as “best practice” and highlighted some of the challenges CTV faces in trying to emulate linear. She said: “What people don’t understand is that it’s really difficult to run a streaming product. You’re trying to integrate lots of different proprietary and third-party pieces of technology that don’t all speak to each other properly, and not everyone has thought of every part of the process – especially when you’re approaching it from the broadcaster perspective. We’re at a stage where we’re all learning and developing and therefore, unfortunately, some viewers aren’t receiving the best service.”
Gubbins elaborated on these technical challenges, noting that AVOD/FAST services are relying on programmatic trading to monetise their ad-break, but that each of the different SSPs that participate in a programmatic auction for a slot within a publisher’s ad break may be responding to that publisher in a slightly different way. This will often mean that bidders may not include the IAB category of the brand, or the name of the advertiser, which results in viewers sometimes seeing the same ad back-to-back in the same ad pods.
He said: “If advertisers can’t manage basic things – such as frequency and competitive ad separation – like they’ve been doing for the last 50 years on linear, they will spend their money with another streaming service that can provide structured ad pods.”