Connected Television Advertising: A New Collective Education
It’s a fact the new wave of TV watching cuts the traditional cable cord. Target audiences are watching, streaming, and tuning in to TV on their terms. With the emergence of Netflix, Hulu, and DVR, the landscape of television has changed forever – so shouldn’t commercials change too? The answer is a resounding yes, but it’s spelled “C-T-V,” not “Y-E-S.” Connected TV (CTV) is the new way to advertise on television.
With the population on the go, it’s getting more difficult to target audiences with as much confidence as we used to have in traditional primetime broadcasting spots, or we’re missing them altogether. This is where CTV comes in to bridge the gap.
Studies show annual traditional TV viewership is dropping among nearly every age group (http://www.marketingcharts.com/television-24817). While it’s continually a marked decline, there is no reason for those invested in TV advertising to panic. Watching television is not stopping – it’s changing.
Connected Television Bridges the Gap
Over-the-top (OTT) and On-demand television has changed where, when, how, and who is viewing TV. The hipster is watching an Indie flick on his iPhone in the coffee house; the soccer mom is watching The Food Network via her tablet on the sidelines; and the football fan’s Smart TV is streaming the big game. With the population on the go, it’s getting more difficult to target audiences with as much confidence as we used to have in traditional primetime broadcasting spots, or we’re missing them altogether. This is where CTV comes in to bridge the gap.
CTV stands for connected television, and it is the ad tech industry’s solution to changing TV viewership. CTV uses technology already integrated online in display ads and pre-roll video to serve ads on the emerging Smart TV, OTT, and on-demand platforms. On the Web and mobile devices this technology, called programmatic or real-time bidding (RTB), hosts real-time auctions online as the webpage loads. In these auctions, advertisers bid to place their ads in front of target audiences based on first or third party data. For CTV, the programmatic process will be no different but is subject to change as improvements and technology is created.
Who stands to gain from CTV? Advertisers, viewers and publishers. Advertisers’ ad dollars will be working harder to be placed in front of their target audiences, identified by vast amounts of data eventually equal to the audience data currently available online. Publishers can utilize undervalued inventory and sell that inventory quicker through auctions. However, some prime-time cable networks are skeptical about CTV, estimating it will devalue their inventory when RTB floor prices are set. Smaller networks with ads that don’t sell through direct sales can benefit from CTV by selling these ad spots at auction. Finally, viewers will get more personalized ads for things they’re more likely interested in while maintaining the convenience of their favorite platforms.
While CTV is the wave of the future, don’t expect to see it fully integrated for a year or two. Inventory will become available as the publishers and exchanges prepare to list them for auction and the logistics of the crucial audience data are supplied.