Why Connected TV Needs A Proper Home

"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Paul Sluberski, regional vice president of sales and video, digital activation East, at Brand Networks.

With eMarketer predicting 88 million households streaming over-the-top (OTT) content and 181.9 million US viewers watching connected TV (CTV) this year, it’s official: The family television, once believed to be at risk of extinction, is making a comeback.

For the past few years, advertisers’ attention has been consumed by smaller screens such as desktops and mobile devices, with budgets and teams following suit. But the tides have shifted. With such a wide range of CTV viewers – from cord-nevers to cord-cutters – these groups have varying preferences and standards, making CTV advertising both complicated and crucial.

But, in practice, CTV advertising is treated like a third wheel. Linear TV and digital budgets, strategies and teams have been around for years, leaving CTV in search of its rightful place within an organization. This raises three important questions about how the inner workings of advertising departments will need to shift to give CTV a home.

Whose lunch is CTV eating?

Some people view digital advertising as “eating TV’s lunch,” taking ad dollars spent on traditional linear television and moving them toward more modern advertising techniques. Throwing CTV into the mix sparks another debate about how this new channel fits into the picture.

Advertisers are starting to ask themselves, “Where should this money come from, TV or digital?” The answer: A little bit of both, with the final decision dependent on campaign goals. The best place to start is to define consumer targets and KPIs.

Consider an automotive brand trying to reach millennials with a gross rating point (GRP) goal and young moms with a digital awareness-to-intent goal. If it’s using CTV to close the gap on GRPs – a TV objective – this campaign should come from TV’s ad budget. If it’s using CTV to close the gap on awareness-to-intent goals – a digital objective – it should come from digital’s budget.

This may seem like an obvious way to reconcile the debate, but some advertising teams who are still getting their feet wet in the CTV arena struggle with allocating CTV spend. Rather than fighting over where the money is coming from, the key is to let the KPIs drive the budgets.

Once the goal-based process for CTV budgeting is clearly laid out, the battle between linear and digital teams will subside and the time and energy spent answering “How will we pay for this?” can be allocated toward “How can we do this right?”

Where do partners come in?

With CTV establishing a stronger presence in advertising budgets, advertising goals can quickly get complicated, making collaboration between brands, vendors and agency partners particularly important.

In an ideal world, each of these teams would be in constant communication. It could look a little something like this: A major yogurt brand is launching a new smoothie for people on the go. The target audience is active moms and commuters on the run – two very different consumer segments that require different creative and targeting.

The brand engages with its creative and buying agencies to build a 360-degree approach to surrounding the customer. The creative agencies know the campaign will appear on TV, CTV, phones, tablets, computers and out-of-home, and the TV creative will be shot with space left for a call to action and with vertical versions for video on mobile. Meanwhile, the digital agency works with its media vendors to build creative ideas that play to each vendor’s strengths.

This process seems like an obvious best practice, but all too often media buyers have to beg to talk to creative agencies. Most of the time it’s a mad scramble, with teams working backward to ensure CTV campaigns run smoothly when they could have easily worked more closely from the get-go.

Can silos truly break down?

A recent study found that 58% of marketers plan to invest in CTV and OTT, but only 53% plan to blend their TV and digital video strategies. That number is far too low, but when you take a closer look you can see why this is challenging.

For linear TV, digital and CTV/OTT to truly live in a symbiotic state, they need to share the same KPI and measurement capabilities. This creates a problem when, for instance, linear television’s performance is measured on GRPs and holding CTV/OTT to the same standard limits its full potential.

Truly collapsing these silos is realistically many years down the road. For now, the onus rests on advertisers to ensure that video, creative and digital DSP teams are in constant communication so that CTV projects run smoothly from start to finish. Media buyers also need to work closely with creative teams to ensure all parties have enough time to get the job done right.

For CTV to find its place in an organization, any remaining silos will need glass walls – a clear view into what’s going on and when, constant communication and flexible budgets. The rise of CTV/OTT ads is just the start of a more connected advertising future.

Follow Brand Networks (@brandnetworks) and AdExchanger (@adexchanger) on Twitter.

 

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