Like third-party cookies for the programmatic advertising ecosystem, IP addresses have become the ad targeting currency of choice for the $26 billion CTV ad market.
But like their cookie cousins, IP addresses face an uncertain future. Increasingly tough and evolving data privacy standards are making personal information like IP addresses incrementally more difficult to use. Yet the industry seems stumped for an alternative to its chosen CTV default.
Universal IDs, allowing ad tech companies to identify users across different websites and devices (including CTVs), is one potential alternative. But the fragmentation of universal IDs, as well as the lack of standardization and interoperability, means an effective model for CTV targeting could be years away.
Content metadata is another option that offers a more viable model – one that moves the ad sphere away from its infatuation with audience targeting and into a rich new ecosystem of precision and nuance. Whether that shift can take shape, however, all depends on the industry working together to analyze and share vast quantities of content-level insights.
IP tracking: a house of cards?
The industry’s overreliance on IPs seems more of a stumble than a calculated move. Excited to make the most of CTV’s booming riches, advertisers haven’t had time to consider the mechanism’s obvious shelf life.
While IP addresses are enough of a blurred line to avoid being banned outright, it’s a fantasy to assume they won’t soon fall foul of global data privacy laws. In fact, Big Tech is already preemptively preparing for these restrictions. Apple, Microsoft and Google have all unveiled various forms of IP blocking or cloaking measures in recent months, while CTV publishers are also getting spooked.
Meanwhile, privacy-compliant solutions, such as The Trade Desk’s Unified ID 2.0, need user consent to work. The upshot? CTV advertising is poleaxed between two approaches, one which is vulnerable to privacy crackdowns and another that may not scale.
IP tracking has another headache, too. Research shows that over 50% of CTV consumers aged 25-54 are co-viewers who watch TV with at least one other person in the room. This figure rises to 70% for upcoming generations, and viewership fragments further across multiple variables, including where and when particular CTV content is consumed.
So, while an IP address can piece together consumer information across multiple devices, it cannot take into account the myriad of CTV users who fall under the umbrella of one household. The same drawback prompts serious questions around brand safety, too.
The case for content metadata
Perhaps any form of audience identifier – whether that’s the devices people use, whom they watch with or if they give consent for data sharing – is a red herring for advertisers. Instead, we should be zeroing in on the content itself.
If we have a granular understanding of what CTV audiences are watching at any one moment in time, the need for any other information fades away.
At the moment, players across the CTV space operate via property-level content metadata, such as the title or genre of a show. The next frontier involves breaking down CTV content on a scene-by-scene basis, creating a much richer ecosystem of metadata tags and providing a powerful and brand-safe currency for CTV ad targeting. Imagine being able to align ads with relevant moments in a cult hit show like Hulu’s “The Bear,” for example, while skipping scenes of violence or drug use.
The fact that so many large publishers still don’t properly tag and pass metadata into the bidstream will have to be addressed. But industry-led regulation and standardization will hopefully ease this problem.
Such a system also restores control to the hands of publishers and their proprietary metadata, creating more balance between them and ad tech vendors/advertisers. Better still, content, not audience, becomes the focus of CTV targeting, creating a model that neatly sidesteps the privacy debate and suits the mindset of any individual or group watching at once.
“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
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