From a business perspective, streaming is still in its adolescent phase – and with puberty often comes unwanted change.
From the rise of programmatic in TV ad buying to the introduction of new ad inventory on Netflix, Disney+ and Prime Video, it’s never been more complicated to buy TV ads than it is today, Eric Schmitt, a research director and analyst at Gartner, tells me.
As buying paths proliferate, targeting gets muddier and TV ad measurement remains an enigma.
“There’s still a long way to go,” Schmitt says, before the streaming ecosystem can fulfill the true potential of connected TV by unlocking more ad dollars. To facilitate that process, he adds, some TV advertisers are evolving how they work with programmatic platforms and using them for campaign management rather than strictly as buying tools.
I spoke with Schmitt to pick his brain about CTV’s biggest pain points and how advertisers can mitigate their TV buying-related headaches.
AdExchanger: How is programmatic buying changing TV ad targeting?
ERIC SCHMITT: Buyers like using demand-side platforms because it gives them access to multiple pools of inventory, targeting and lower prices. But buyers are struggling to make sense of disparate audience plans and reporting coming from different DSPs.
Signal loss is making the problem much worse. Browser cookies have long served as a persistent identifier across ad channels, and TV buyers would use cookies to match ad exposures with online behavior. But now that ability is degrading, and there’s a lot of probabilistic mumbo jumbo out there that just isn’t panning out.
Poor targeting is especially blatant for regional and hyperlocal advertisers trying to reach consumers in a specific area. I often see commercials for small retailers that are nowhere near me, which are wasted impressions.
What should TV advertisers do to make their lives a little easier?
This is where marketers need to be really vigilant. Programmatic sales are high-margin, so agencies are very incentivized to push more buys through DSPs. But the targeting has degraded, so it does still behoove advertisers to talk directly to publishers.
Is this dynamic why direct-sold ads sometimes have better targeting than their programmatic counterparts?
Absolutely.
For example, advertisers can buy ads directly from publisher partners, and then manage that campaign through their preferred DSP.
More TV advertisers are choosing to use DSPs as a campaign tracking tool rather than for planning and buying, especially advertisers that are more focused on location-based ads rather than hyper-targeted ones.
What about digital-native brands that want to treat streaming like a performance marketing channel?
Competent performance marketers are starting to embrace streaming, including using it to compare incrementality with the rest of their buys. Their dollars are helping contribute to the maturation of the market.
At the same time, there’s a big difference between CTV and over-the-top (OTT).
Because OTT encompasses devices other than television sets, like phones and desktops, there’s more signal and attribution there that’ll attract direct response advertisers. People still don’t interrupt their TV viewing sessions very often to go and buy things, but when they do, it’s much more likely to happen on a personal device, not a TV screen.
What streaming trends will dominate for the remainder of the year?
The digital-native platforms are taking control of connected TV – and it’s not just the new entrants to ad-supported streaming, like Netflix and Prime Video. YouTube’s grip continues to tighten on the CTV market.
TV programmers and digital platforms will continue to compete for streaming ad dollars by trying to differentiate themselves. Ad load is an especially big question streamers are trying to tackle right now.
This interview has been lightly edited and condensed.
Are you enjoying this newsletter? Let me know what you think. Hit me up at alyssa@adexchanger.com.
For more articles featuring Eric Schmitt, click here.
