“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is by Mark Walker, CEO and co-founder of Direct Digital Holdings.
For marketers, the great promise of connected TV is that it will blend the strengths of traditional TV and digital media, marrying powerful branding with precision targeting and tracking.
It sounds like ad nirvana. That is, until you realize just how complicated it may be to properly measure the value of this powerful combination.
CTV is at a crossroads. We’re already seeing streaming become the dominant way TV is delivered, which opens up CTV ads to a wealth of possibilities. With that, the industry will face an existential question: What is the role of TV advertising now that it is connected?
Right now, the TV industry appears to be expending the majority of its energy on finding a more comprehensive, accurate way to count audiences. Meanwhile, there are potentially billions of ad dollars controlled by small to midsize businesses that are looking for metrics that capture ROI the way they do on social platforms.
It’s unclear where we are headed. The measurement path the TV ad business chooses could unlock vast new spending. Or lock the medium into a fixed, finite lane that serves neither party well.
The big money in waiting
As ad-supported CTV viewing has exploded, the early money has clearly been focused on the top of the funnel. Thus far, the booming CTV market has been primarily traditional TV brands shifting budgets to streaming, typically as part of huge packages with the likes of Disney or NBCUniversal.
This is likely why we’ve seen so much attention and debate around TV currencies. Facing declining linear ratings, the incumbent TV networks have been pushing Nielsen to change and capture nonlinear viewers, just as tons of VC funding has poured into the market to fuel alternative currency startups.
Yet, as encouraging as it is to see TV companies embrace more big data methodologies over panels, gauging ad impact and response has taken a back seat.
That feels short-sighted. Direct-to-consumer businesses have thrived using social platforms to drive leads. That market has been thrown into turmoil thanks to Apple’s crackdown on cross-app tracking. As a result, ad prices are soaring, and many of these companies are primed to spend elsewhere.
That’s just DTC brands. Let’s not forget the still huge budgets commanded by local advertisers. Car dealers and wireless providers still spend $21 billion on local TV and $12 billion on radio, per Kantar. These marketers would also seem poised to move into CTV in a big way.
How do we serve all these constituencies? Is there a way to build metrics, standards and currencies that can serve every segment of the market?
The currency question
CTV’s promise is too great to limit it to one type of marketing. Thus, when it comes to measurement, CTV needs to serve all types of brands and levels of the purchase funnel.
That will require collaboration and ingenuity across the industry. For the bigger media conglomerates, that means offering more options and platforms for the mid-market, not just the top 200 traditional TV spenders. These giants’ embrace of clean room technologies is a great start, but TV advertising needs to be more democratic and easier to buy and measure.
From the ad tech point of view, we need to spark more innovation around the middle and bottom of the funnel. The same applies to the measurement sector. There’s a big opening for a new wave of tech vendors and attribution startups built for CTV specifically. Whoever can create tools designed to measure and factor in audience numbers, attention and impact and tie it all together should win.
The revenue potential is massive. Let’s not miss the moment by predetermining our destiny by leaning on the simplest, easiest metrics at hand.
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