This article is sponsored by Xandr.
Given the events of the past month, few questions should remain about the importance of Connected TV (CTV) as an integral part of advertisers’ media plans. According to Nielsen, the AT&T TV Now streaming service saw an approximately 20% increase in total viewing time in the third week of March compared to the first week, and ad requests from CTV devices have more than doubled across the Xandr platform from the first week of March to the fourth week.
From an advertising perspective, the high-growth, high-CPM CTV market instills greater confidence in finding target audiences than linear TV, especially as traditional TV viewership declines. But behind the hype lies one key challenge impacting the CTV user experience: how to develop audience-targeted buys in the face of endemic identity challenges.
In comparison to targeted digital display, CTV advertising doesn’t rely on cookies or contextual targeting in the traditional sense. CTV devices also contrast with mobile phones, where a mobile identifier for advertising is available to be used by each app within it. When it comes to CTV there is no universal or persistent standard for device identification, and various players in the complex CTV ecosystem operate as disparate “walled gardens.”
Because frequency capping, audience targeting and attribution rely on the existence of persistent identifiers, the lack of persistent and standardized IDs on CTVs makes these functions challenging for the dog food and fitness apparel companies trying to highlight their products to Sarah.
In an ideal scenario for advertising use cases, there would be a standard for CTV identification –such as a user-resettable platform identifier representing that device, and consumers would be able to manage permissions for targeted advertising. In this example, one CTV device in Sarah's home would have a resettable device ID of CTVID123345. The various app publishers would retrieve and pass through this identifier associated with the operating system on ad requests, which buyers could then use for targeting and frequency management.
Device proliferation complicates holistic identity
While one challenge is the lack of a unique and persistent ID across a single device, let’s not forget that users consume content across multiple screens and devices. Buyers should have a way to reconcile identity of individuals and households, to allow for more holistic targeting and measurement.
In reality, this is not occurring with consistency across the CTV ecosystem. App publishers and sellers take different approaches to CTV identifiers. Some OS platforms limit the use of and sharing of their IDs to control access to their viewers’ valuable deterministic data. Where CTV OS platforms do provide a way to access their IDs, many app publishers may not choose to use these platform identifiers, instead utilizing their own identifiers with varying degrees of persistence.
This fragmentation in CTV identity makes it difficult for marketers to properly manage ad exposure to individuals and households. If you can’t be confident you’re reaching a consumer – or their devices – you risk creating a negative consumer experience where viewers see irrelevant ads or the same ad multiple times within a show. This also contributes to wasted advertising spend, as the inability to accurately record household-level exposures across applications and devices in CTV negatively impacts the accuracy of in-flight and post-campaign measurement. Given these challenges, it’s not surprising that the majority of investment in CTV is being executed via direct IO with a few, scaled distribution platforms.
What can advertisers do?
Today, advertisers have access to tools that attempt to solve for the challenges of cross-screen, cross-device fragmentation in CTV. Solutions currently offered by many DSPs and cross-channel video planning tools leverage probabilistic identity and modeled data sets to improve the effectiveness and accountability of CTV buying. However, their reliance on inconsistent and imprecise data sets still limits both reach and accuracy for audience-targeted buys in CTV environments.
There is reason to be optimistic, however. Companies with access to scaled first-party, deterministic data sets are working to leverage these assets to make better sense of CTV identity fragmentation. Trade bodies, such as the IAB, are working to create universal standards that can be adopted by applications and device manufacturers, alike. Finally, marketplace ad tech companies, which have direct relationships with both buyers and sellers of CTV inventory, are well positioned to leverage the consistency and volume of data signals within their ecosystems to create more accurate, and scaled, identity solutions.
As CTV engagement increases, buyers should be educating themselves on the CTV ecosystem, the value of audience-based buying, and the ways in which their technology partners are navigating industry challenges to unlock the full CTV opportunity.