“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Joydeep Gangopadhyay, solutions architecture at LiveRail, a Facebook company.
In our cross-screen universe, digital omnivores – also known as cross-platform consumers – love to watch and share videos, using a variety of connected devices to do so. But we aren’t just talking about short videos of funny cat tricks or game-winning touchdown passes. Nearly half of consumers view full-length movies and TV shows over the Internet daily, and more than a third do so weekly.
When considering what channel will help drive success for brand advertisers and enable a high-quality, engaging user experience, connected TV devices provide the ideal medium for video ads. While adoption of Internet-enabled TVs among consumers was slower than first anticipated by industry analysts, their popularity has significantly climbed over the past several years. Today, 63% of US households own an Internet-ready TV and, by 2020, one in four TVs worldwide is expected to be a connected TV. These TVs, along with over-the-top (OTT) content, offer consumers new mediums with which to view online video content.
From a content perspective, publishers need to ask themselves what their users want to watch on their connected TV devices. Because consumers typically use these devices in the comfort of their own homes, they expect a high-quality experience with “TV-like” episodic content. Users also usually spend more time using a specific app than they would on their mobile device.
The growing popularity of these devices can be great for publishers from a monetization standpoint. With HD-quality content on a relatively large screen and TV-like ad pods (multiple ads in a given ad break) that help recreate a traditional TV viewing experience, brand advertisers couldn’t ask for a better format. There is also more flexibility when considering the length of ads delivered via connected TV, as traditional TV ads run anywhere from a few seconds to several minutes.
A New Set Of Challenges
This emerging channel, however, brings new complexities not prevalent among other channels. For instance, different technologies that support protocols like HTTP Live Streaming are required to deliver streaming HD-quality video content. Unlike with mobile, most connected TV devices don’t support third-party SDKs, and integrations are more complex because they require server-side ad insertion rather than client-side, which may call for re-engineering and makes the monetization setup a bit more challenging. Ad technology platforms have built their technology stack to support server-side ad decisioning and multichannel ad delivery to make it easier for publishers to monetize their connected TV inventory.
Another consideration to keep in mind is that connected TV inventory calls for higher-quality ads and it’s much more difficult to get an HD-quality, 1080-pixel creative ad from an advertiser that is used to adhering to the lower creative standards required for mobile or desktop web.
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Usually advertisers buy specific audiences, and with certain connected devices, there is typically one per household, making it difficult to attribute the device to one specific person and leaving advertisers uncertain that their targeted demographic viewed the ad.
Many advertisers are also accustomed to the advanced measurement that desktop and mobile provide. With connected TV inventory, there are no cookies and Nielsen OCR isn’t available yet, which means key metrics like audience reach and conversion are unavailable, making the determination of ROI a much more difficult task.
The current demand for connected TV inventory has been rather spiky in the last year as advertisers slowly test the waters. But with many different types of publishers with unique considerations, this emerging channel will only continue to grow in popularity, making corresponding video ad-monetization strategies necessary. With an average completion rate of 99% and high viewability, many big-name brand advertisers are becoming more eager to purchase connected TV inventory.
I’m confident we’ll see technology continue to advance to help ensure the viewer, publisher and advertiser priorities are aligned and needs are met from all angles.
Follow LiveRail (@LiveRail) and AdExchanger (@adexchanger) on Twitter.
