“On TV and Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Gijsbert Pols, PhD, director of connected TV and new channels at Adjust.
Connected TV advertising is here to stay. It is big, and it is going to get bigger. Ad spend in the US alone is expected to increase 27% in 2023, despite an economic downturn.
All over the world, advertisers are eagerly exploring creative ways to include CTV ads into their cross-device campaigns, determining how to get their brands in front of consumers on the big screen to spur action on mobile.
However, there is a downside. In the case of CTV, it’s ad money leaking away due to fraud. Whether CTV ad fraud rates have dropped or grown, depending on whom you believe, ad fraud still poses a serious risk, particularly due to structural issues that put fraudsters at an advantage.
Why is money being lost?
CTV is still a relatively new space lacking established best practices, regulations, industry standards and, most importantly, expertise. And where expertise is lacking, things can go wrong easily.
CTV is also complex. While most of the native inventory is sold directly by CTV platforms, in-stream inventory is sold by CTV platforms, streaming services and intermediaries. Advertisers usually have to combine these players to reach their audience, but face difficulties receiving consistent data from the various players.
Unlike mobile, where audiences are conveniently split between Android and iOS, people have all sorts of CTV platforms in their households. On top of that, CTV devices are often used by multiple people, complicating the process of targeting, frequency capping and measurement.
This complexity can lead to accidents. Take the recent case where GroupM and iSpot reported a $1 billion loss of ad money because the devices serving the ads were switched off. In this case, neither the apps nor the streaming devices could have known whether the smart TVs were on or off.
Unfortunately, an environment like this is one where fraudsters can thrive. One of the most popular ways fraud is committed is by impersonating CTV devices with mobile or other digital devices, allowing fraudsters to take advantage of the comparably higher CPMs paid for CTV inventory. In some cases, there are not even real users behind the mobile devices.
It doesn’t stop there. Fraudsters count fake impressions, steal QR-code scans and even spoof users in order to get their hands on CTV ad budgets.
How can advertisers avoid losing money to fraud?
To avoid fraud, choose your inventory vendors wisely. One tactic is to buy directly from vendors with direct ownership of their inventory, namely streaming services and device suppliers. Working with them means staying close to the source and maintaining control of the timing, the format and the context in which your ads appear.
The downside, however, is that your reach will be limited. To avoid this, go to vendors that have specialized in CTV advertising over the last few years. They ensure reach while allowing you to stay in control of the context surrounding your ads. Moreover, they can provide the data you will need to monitor whether ads are served properly.
When considering industry standards around measuring CTV’s impact, applying the concepts from digital seems to be the popular option. But it is not without its challenges. The last-touch attribution logic used for mobile and desktop does not work well for CTV, which is something only a few players in the industry have addressed.
Finally: Apply common sense. If you are advertising on a streaming platform that runs live sports, for example, you can expect peaks in ad engagement around match time, not during the middle of the night. Also, watch out for the connection between targeted audiences and outcomes. If you are running a CTV campaign on a streaming platform aimed at female millennials and you see adoption instead from male boomers, something may not be right.
While already driving substantial results, CTV is a new space full of promise and potential. But it has some structural flaws that can cost advertisers a lot of money, even in the absence of fraudulent intent.
The good news is that, with the right partners, emerging industry standards and common sense, you can avoid most of the harm and experience CTV as the exciting place it is.
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