“On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Tal Chalozin, CTO and cofounder at Innovid.
Connected TV is everywhere. With 83% of all American homes projected to have at least one CTV device by 2023, it’s clear there’s a massive opportunity for connecting with audiences. Unfortunately, it’s not quite as simple as it sounds. Fragmentation across apps, devices, and platforms means that while most viewers are benefiting from CTV, it’s still a challenge for marketers to reach and measure their audiences in a unified way. However, while fragmentation does create some challenges for marketers looking to scale their campaigns on CTV, it also presents some significant opportunities for ad buyers.
The price is right
Fragmentation means competition, and competition means lower prices. When platforms have to compete against one another to secure ad dollars, then the number one lever available to them is their price. As long as the connected TV space remains heavily fragmented, marketers will benefit from a buyer’s market.
Much like the early days of social media advertising when multiple competing platforms offered incredible reach for comparative pennies, marketers have a unique opportunity to hit a huge number of new customers with their message for a fraction of the price of linear television. Already 24% of marketers have identified a cost effective CPM as their reason for making the switch from linear to CTV. Although we expect that over time that price of CTV will rise due to consolidation, right now marketers have a unique opportunity to scale fast for cheap.
Innovation becomes the norm
Competition doesn’t only drive prices down, it also inspires innovation. A critical way that CTV providers compete for advertisers’ attention is with new technologies, tools, and solutions to sweeten their core offering. For example when compared to standard pre-roll, advanced creative ad experiences on CTV drive roughly an 8% better completion rate. A fragmented CTV ecosystem keeps everyone on their toes and ensures evolving advertising formats and products from top providers to strive for better performance and push boundaries on what’s possible creatively.
Marketers reconsider legacy solutions
CTV has ushered in an opportunity for broadcast TV advertisers to reevaluate their legacy measurement solutions, allowing them to lean into digital and gain more optimization opportunities. Marketers can not only choose where to spend and what audiences they want to reach but with streaming, they also gain a wealth of new ways to measure their ROI. Eighty-eight percent of marketers listed media specific ROI and objective measurement as an important focus to them. With that in mind, new CTV players are rushing to build solutions that directly prove their unique platform’s value, all with the goal of gaining more media dollars. This has led to a race for comprehensive and transparent reporting, continuing to push the TV measurement industry forward. While fragmentation doesn’t necessarily make life easier for marketers, it does give them an opportunity to gain a deeper understanding of their performance.
Fragmentation: friend or foe?
AdExchanger Daily
Get our editors’ roundup delivered to your inbox every weekday.
Daily Roundup
CTV is at a critical inflection point. It’s reached wide adoption, but a dominant player hasn’t yet emerged. Roku is in the lead with 84.7 million users last year, but it’s not without competition from Amazon Fire TV which has 71.2 million users. Right now, marketers have an unprecedented opportunity to reach new customers at a lower cost and with more control than they could ever expect from traditional broadcast television. While fragmentation poses challenges, it also allows marketers to play a pivotal role in shaping this emerging media ecosystem. The choices marketers make today about where to spend their advertising dollars will no doubt shape the future of CTV. Incentivizing interoperability now will be key to ensuring future transparency, and act as a check on any dominant players that may emerge. For marketers well positioned to take advantage of these opportunities, CTV fragmentation could be the key to a new era of brand success.
Follow Tal Chalozin (@Chalozin) and AdExchanger (@adexchanger) on Twitter.
