"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Jessica Hogue, GM of measurement and analytics at Innovid.
We’re entering the 2.0 era of CTV. Many brands are gaining confidence that CTV provides extended reach to their linear TV campaign due to the new tools available in the market this year. The question “Does CTV provide incrementality?” (a conclusive “yes”) is giving way to questions about how to optimize frequency by content partner, device and OS. Some advertisers are even challenging agencies to consider what a CTV-first awareness strategy might entail.
Streaming now accounts for about 25% of time spent on TV but only 12% of ad spend. Why? In mobile, the initial inability to measure reach and impact stymied widespread adoption. It took about a decade for mobile advertising to catch up to consumer time spent. Similar issues have kept some marketers from investing in CTV at scale. While CTV is maturing, it’s still new enough that when it’s used experimentally, there’s less rigor about setting goals, guarantees and using KPIs to measure progress.
In a streaming-first world, marketers need to move faster than ever. Deploying a consistent set of translatable metrics can shrink the time it takes to build that knowledge and confidence. Marketers tend to ask three fundamental questions and there are a set of metrics that can be used consistently to address them.
How effective is CTV at growing unique reach?
This is a question about the ability to use CTV to deliver broad awareness or branding messages. Of the approximately 75 million CTV homes in the United States that receive digital advertising, campaigns on average reach about 25% of this total universe. This suggests there are many more households capable of being reached to drive brand share of voice.
One way to understand CTV’s ability to scale is to quantify the unique households reached by each publisher on a campaign. Some sources may be uniquely capable of delivering a specific audience while others provide more overall reach. Comparing unique households reached enables marketers to explore how each inventory source adds diversity and scale to the mix.
Some industry insiders are concerned that more impressions will only result in ad collision, saturation and, ultimately, waste. Unique reach efficiency provides an easy comparison of the rate at which publishers convert impressions to net new households reached. Frequency can also be measured holistically at a household level. This goes a step further than monitoring frequency at an individual publisher level where caps are often instituted. By taking a broad household view advertisers are able to understand where potential overlaps exist when inventory is purchased directly from the publisher or through programmatic or exchanges.
Taking this one step further, introducing the effective CPM provides a new baseline. Cost per unique reach helps to justify the CPMs required to achieve incrementality to traditional television media, which can require substantial volume, and the value of reaching otherwise hard-to-reach audiences, such as cord cutters and cord nevers.
How do I get scale across a fragmented market?
Anyone operating in CTV right now is intimately familiar with the fragmentation in the market. This is partially why we’re seeing growth in the use of DSPs, which can automate and simplify some of the buying process. The bigger challenge of fragmentation is it makes it difficult to understand how the parts of the whole work together.
Using delivered impressions as a baseline, you can compute the rate of duplication amongst inventory sources. The possible combinations between content owners and devices can be daunting. Over time – and taking into account different buying and media planning techniques (targeting, contextual, etc.) – evaluating rates of duplication can provide meaningful insight about the right combinations of inventory that achieve the most scale advantage.
How should I evaluate CTV’s ROI?
Proving the value of CTV advertising runs the gamut from demonstrating incrementality on linear TV or other forms of digital advertising to full funnel attribution. As an industry, we need to evolve past completion rates as the primary barometer.
A word of advice: set clear objectives. It is difficult to evaluate CTV media if it is not deployed intentionally or measured. KPIs such as Unique Reach Per Household, Cost Per Unique Reach, Unique Reach Efficiency and overlap metrics provide much needed guideposts along the journey to achieving the remarkable results CTV advertising can drive.