Home On TV & Video The Top 5 Questions Marketers Ask About CTV Advertising

The Top 5 Questions Marketers Ask About CTV Advertising

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On TV & Video” is a column exploring opportunities and challenges in advanced TV and video. 

Today’s column is by tvScientific CEO and co-founder Jason Fairchild.

The fastest growing segment of the $72 billion TV ad market is CTV advertising. There are dramatic changes happening within TV advertising, which has traditionally been dominated by roughly 300 national advertisers. But with new connected devices, advertising technology is integrating with these platforms to make ads on CTV accessible and measurable for all businesses.

I talk with marketers every day about CTV and get to do a bit of pattern recognition around what issues, questions and concerns arise in multiple categories, from Fortune 500 brands to large direct-to-consumer (DTC) businesses to the local garden store. These are the five most common questions or themes that come up in conversation:

1. As an awareness channel, has CTV hit critical mass in terms of audience scale?

Recent data from Samsung points to an astonishing statistic: 63% of all TV viewing time now happens on streaming services.

With this data in mind, CTV is an absolute must buy in order to reach TV viewers at scale. If you want to reach certain demographics that are more correlated to “cord cutters,” it’s even more vitally important.

2. What is the difference between CTV and OTT? Does it really matter?

This is really important. OTT refers to streaming content consumption on any device. That is, a laptop, smartphone, tablet, and an actual TV.  CTV is a subset of OTT, where the streaming content is delivered to actual TVs (“TV glass,” as the TV OEMs like to say).

Consumers are in a different “modality” for each delivery device – “lean back” vs “lead forward.” All of these devices and user modalities have value, but they should be measured discreetly because a) they are fundamentally different; and b) marketers will almost certainly be able to optimize based on the delivery device in order to drive performance.

3. What kind of ad creative do I need? What are best practices in this area?

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First and foremost, marketers should take a data-driven approach to creative. They should develop multiple iterations of TV creatives at time of production, and then test each for engagement and/or performance metrics. Platforms like QuickFrame do this process at an astonishingly low cost relative to traditional TV ad production. This will be one of the most exciting areas for innovation in coming years.

As testament to that innovation, we are seeing incredible early proof points in CTV and QR codes. During the pandemic, diners started picking their food via QR code-activated menus, which made restaurant dining safer. Now, the adoption curve of consumers using QR codes is astonishing.

Data from next generation QR company, Flowcode, shows CTV scan rates are 3x higher driven by cord cutters who are tech enthusiasts. In many instances, TV scan rates are higher than average CTRs in digital. Some CTV codes can get high single digit scan rates within content. We think this will be a game-changer for “performance TV.”

4. What types of performance measurement are available in CTV vs linear? Can I achieve true ROAS marketing as in social or search, or is it directional?

Linear TV measurement is mostly based on panel approaches, from Nielsen to the more advanced ACR technology (Automatic Content Recognition) panels.  In addition to panels, marketers use linear flight dates to monitor impact to website traffic via Google Analytics.  These approaches are directionally good but far removed from the digital-like 1:1 attribution that exists in search and social.

CTV is like digital in that it is delivered through the internet. From a technology perspective, it has the potential to support many of the same types of measurement.  Marketers can now see the deterministic path from CTV ad exposure to outcome (website traffic, sales, conversion, ROAS) via the latest technologies.

5. What are the minimum spend levels for CTV in order to understand if CTV is working?

Imagine if search and social platforms required $50K minimums when they got started! I was at GoTo.com (rebranded as Overture) in the early days of paid search and we sold clicks for ten cents with no minimums!

Most “programmatic” platforms have a $50,000 to $100,000 per month minimum spend threshold, and most CTV media sales organizations have $20,000 to $50,000 minimums.  I firmly believe that in order for CTV to attract millions of advertisers like search and social, CTV buying consoles should be exactly like search and social from a marketer POV, including no minimum spend levels and 100% performance measurability in unambiguous, digital-first language and metrics. Best practices on minimum spend vary by category, but some can set spend levels as low as $500, at which point it’s easy for marketers to scale based on ROAS KPIs.

Follow Jason Fairchild (@jasonff) and AdExchanger (@adexchanger) on Twitter.

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