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The connected TV (CTV) advertising industry has made great strides in targeting, automation and measurement, but it still lags behind social platforms in one critical area: optimizing campaigns based on outcome data.
Unlike the large social platforms, where advertisers routinely share conversion and sales data via pixels and conversion APIs (CAPIs), CTV buyers have been more reluctant to enable such data flows. This reluctance creates a fundamental challenge for optimizing CTV ad spend and performance.
The current state: data out, not data in
Today’s CTV ad-serving model primarily functions as a “data out” system. Advertisers place measurement pixels in ad tags, allowing exposure data to be sent out to third-party measurement firms, such as iSpot or VideoAmp. These firms then match ad exposure with actual sales (e.g., Amazon) or models that simulate the sales data and provide postcampaign reporting.
While this approach enables measurement, it does not enable real-time optimization. The supply-side ad servers that deliver ads in CTV environments remain “blind” – optimizing only for impression delivery rather than business outcomes.
In contrast, platforms like Meta and Google operate as “data in” systems. They ingest outcome data directly from advertisers via CAPI, enabling their ad servers to optimize campaigns in real time.
As soon as a user interacts with a brand’s website or app, they can update its targeting and bidding algorithms, ensuring that future ad exposures are more likely to drive conversions. This closed-loop feedback mechanism makes their advertising systems incredibly efficient and performance-driven.
The challenges of implementing a standardized CTV conversion API
While CAPIs already exist across platforms like TikTok, Yahoo and Pinterest, their implementation is highly customized per platform, creating inefficiencies for advertisers and their partners. The IAB Tech Lab is now working toward standardizing the API itself, removing friction and overhead costs associated with scaling CAPI integrations across multiple publishers.
However, there are unique challenges in implementing a CTV-specific version of CAPI:
1. CTV is not an infinite supply marketplace
CTV publishers have constrained supply unlike scaled social platforms, which operate virtually unlimited ad inventories. If outcome-based optimization were to take hold, it could mean that ad dollars shift from one CTV publisher to another based on performance.
Would major publishers allow such optimization at their own expense? Without collaboration and clear benefits, publishers may resist an open optimization framework.
2. Data privacy and security
In today’s regulatory climate, the idea of sending first-party conversion data into publisher or platform environments raises concerns. Privacy laws such as GDPR, CCPA and evolving US state regulations make it difficult to enable broad data sharing without explicit consumer consent and rigorous protections.
However, advancements in privacy enhancing technologies (PETs) could help address these concerns and make data-sharing more privacy-compliant.
3. Who controls optimization?
In CTV, there are multiple layers of ad decisioning – DSPs, SSPs and publisher ad servers. Who should ingest the conversion data? DSPs are better equipped for bid optimization, but would this setup benefit publishers? If outcome-based optimization is to work, CTV needs clear frameworks that define where and how conversion data flows into the ecosystem.
A standardized CTV CAPI could provide advertisers with a common taxonomy, nomenclature and data structure, similar to how OpenRTB removed friction in programmatic advertising.
The path forward: a standardized CTV CAPI
Despite these challenges, there is an opportunity for the CTV industry to leapfrog past some of the limitations of walled garden CAPIs by designing a more privacy-conscious and flexible standard.
A CTV-specific conversion API could:
- Enable privacy-safe data sharing: Instead of raw first-party data, hashed identifiers or anonymized event data could be passed via secure methods, similar to how LiveRamp or Experian handle offline-to-online conversions.
- Standardize conversion tracking across CTV: Rather than each publisher or DSP building its own proprietary solution, a unified CTV CAPI framework would make adoption easier for advertisers, accelerating scale and efficiency.
- Incentivize data sharing with performance insights: Buyers may be more willing to share conversion data if they receive meaningful insights in return – such as benchmarks, cohort analysis or predictive modeling for campaign optimization.
The imperative for CTV to close the gap
The demand for outcome-driven advertising is not going away. As more CTV campaigns are evaluated on lower-funnel metrics, the industry must evolve its optimization capabilities beyond impression delivery. The solution is designing a CTV-native framework that aligns with the realities of streaming media.
For this to happen, collaboration is key. Advertisers, agencies, publishers and ad tech providers must come together to define how conversion data can be shared, processed and activated in ways that benefit all stakeholders.
By following the lead of initiatives like OpenRTB and the IAB Tech Lab’s standardization efforts, a unified CTV CAPI could unlock greater efficiency, transparency and performance – making CTV a true full-funnel advertising channel.
“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
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