“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is by Andrew Mullins, director of programmatic at Realtime Agency.
We’ve all seen a traditional marketing funnel: Awareness and consideration typically will sit at the top and are judged by soft metrics such as impressions and views. Purchase and loyalty are at the bottom and judged by hard sales or conversions.
Traditional TV ads have historically sat at the top of the marketing funnel. But where do we place connected TV? It is TV, after all.
Unlike traditional television, connected TV (CTV) marries a century-old piece of technology – your TV – with the capabilities of the internet: think data, interactivity, tracking, more reliable attribution, etc. This presents an interesting challenge when we think about where CTV belongs in a marketing funnel.
It is TV, but it isn’t.
Engagement is lacking
CTV allows marketers to target ads to granular first-party audiences, inside specific geos, with frequency capping and modeling layered on top. This means that while CTV CPMs can often be on-par or higher than traditional TV CPMs, the quality of impression often surpasses what you’d find with traditional TV CPMs.
On top of that, connected TV ads are becoming more interactive, with companies like Innovid and Brightline pioneering high-impact units that make the TV screen look more like a phone or computer. Google is even rolling out shoppable TV ads that allow consumers to scroll through, browse and purchase products from their TV screens. Already, CTV ad buying tactics can mirror tactics used for other digital channels. Advertisers can use website retargeting/remarketing or even lookalikes to reach high-intent prospecting audiences.
While interactive units might be impactful and have demonstrated to dramatically increase customer engagement, the direct action clickthrough rates on TVs are nowhere near the 3%-5% rates advertisers can garner on Facebook or native placements. Interactive technology just isn’t seamless enough to make users feel compelled to pick up a remote and engage.
CTV is just better TV
Some advertisers will tell you that CTV can compete alongside any of the best mid-to-lower funnel placements out there. But the data and TV technology just don’t support this – yet. That’s why connected TV doesn’t strictly belong lower in the marketing funnel than traditional TV. Instead, with today’s technological landscape, it should simply be viewed as a smarter way to run upper-funnel advertising. Although that’s not to say this won’t change in the near future.
After studying tens of thousands of points of data to measure the effectiveness of upper-funnel marketing across platforms, we’ve concluded that CTV does a 20%-30% better job on average than any other placement in driving brand-changing engagement metrics due to its ability to target audiences in an environment that is sound-on, unskippable and completely viewable.
While direct response marketing strategies probably won’t deliver great performance when interactive CTV ads are compared to their social and native placements, CTV is a brand marketer’s best friend. It prevents the waste linear TV buyers see in oversaturated audiences and targeting outside of the desired geo. And it gives advertisers the data and control they need to get their ads in front of the users they need for brand growth.
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