Most performance marketers’ experience with connected TV starts with sticker shock and ends with broken promises.
It wasn’t supposed to be this way. When CTV burst onto the scene as the holy grail of reach and targeting, eyes popped at the rates quoted by the big CTV players. Marketers held out hope that the promise of hyper-targeting would make the high costs worth it.
That promise never materialized. Marketers didn’t see incrementality over time.
But the problem isn’t the channel; it’s how we’ve approached the channel.
Cost is the core issue
One issue is CTV’s theoretical hyper-targeting crashing into the realities of highly variable device graphs and shared streaming accounts. Marketers are paying incredibly high CPMs to hit the bull’s-eye of their target market. But they’re getting their targets’ spouses, their kids or their dogs instead. This is part of the reason the CTV ROAS equation isn’t adding up.
But the core issue is cost. CTV targeting isn’t that far off. But you can’t afford to be missing the bull’s-eye (by even a little bit) if you’re betting your whole budget on high-CPM CTV.
Case in point: Big brand marketers have had better luck – after all, their campaign success depends more on building awareness than ROI.
Performance marketers don’t have the luxury of huge budgets. Yet they’re the ones best suited for the CTV space: They’re digital natives with the savvy understanding of digital targeting.
Here’s what needs to happen to bring the promise of CTV to the masses for performance marketing.
Shorten your supply path
The supply side has done a great job of selling high costs as the inevitable product of hyper-targeting. But (questionable accuracy of CTV hyper-targeting aside) the truth is that – like most things in the ad tech world – the supply path has grown too long and complicated. More layers sitting between the brand and the publisher mean marketers are paying more fees that float the margins of these rent-seeking middlemen.
We need to shorten that supply path if we want CTV to mature into a broadly accessible channel for marketers. And the good news is we’re already seeing progress.
For example, Marketing Architects built its own DSP for CTV instead of taking the industry-standard white-labeling approach.
This kind of homegrown agency DSP (we call ours Annika Streaming) isn’t just about cutting out all the muddling middlemen. We’re using technology to both find and understand new audiences and uncover unsold ad inventory that exists across the CTV landscape. This creates more of a direct marketplace for streaming ad inventory, so marketers can get access to CTV’s benefits without the high costs.
Broaden your aim
Digital-savvy performance marketers often come to CTV with extremely refined understanding of their target audiences. But lowering the cost barrier-to-entry enables them to approach CTV as both a bottom- and top-of-funnel channel.
While the primary target is still the primary target, there’s also a secondary and tertiary ring of consumers that may not be perfect – but they’re close. So, what do you do with a channel that has the reach capabilities that digital doesn’t?
The answer is to broaden your aim. Widen the net. Retest and look for those second- and third-ring targets. Speak to consumers that aren’t yet in the market to build mental availability that will drive toward a future sale.
This is where cost comes back in, because it’s all an ROI equation. Your campaign might not be as responsive if you’re targeting that secondary or tertiary audience. But if you’re getting the media at half the price, the math might work out quite well.
Broadening your aim also means using smarter ways to find those new and broader audiences. Marketers need to look at contextual and geo-based targeting to illuminate those secondary and tertiary targets – while staying on the right side of evolving data privacy laws and public expectations/sensitivities.
Get smart about measurement
Performance marketers need to show ROAS, even for a top-of-funnel channel. Being able to see lift over baseline is essential in truly understanding the incrementality of your CTV spend. But attribution in CTV is a mess at the moment.
Device graphs are so wide at this point that CTV measurements are muddy and over-attribution is rampant. So, when you think about attribution, you really need to ensure that you’re using multiple methodologies to validate: deploying incrementality tests, holdout groups, etc.
Ensuring that you’ve got fractionalization of attribution happening – that it’s not first or last touch – is paramount in getting a complete and accurate picture of what CTV is doing for your brand.
Adapting to meet consumers where they are
If you look at the last 100 years – or even the last 20 – marketers have continually adjusted strategies to fit evolving media consumption. Channels that were previously viewed as too new, too niche or just too expensive get reframed by new technologies and new approaches.
That’s where we’re at with CTV right now. The channel is still in its relative infancy, yet it’s rapidly becoming a very dominant platform. CTV reaches audiences that traditional TV often misses – particularly younger, tech-savvy demographics. These are audiences that marketers can’t afford to ignore if they want to build brands for tomorrow. Moreover, there’s no arguing the potential of fusing TV’s immersive experience with digital’s precision.
With some gentle nudges in the right direction (shorten your supply path, broaden your aim, get smart about measurement), we’re going to see performance marketers finally begin to grasp that potential – tapping into a potent trifecta of wide reach, precise targeting and deeper engagement that marketers can’t achieve anywhere else.
