5 predictions for the future of CTV, according to experts at Advertising Week New York
A single, universal measurement currency may not be on the horizon after all, experts said.
The CTV ecosystem is undergoing massive change / Tech Daily
As connected television (CTV) gains steam among both viewers and advertisers – with over 90% of US households reachable via CTV programmatic media and ad dollars funneling from linear to streaming – the opportunities are abundant.
However, television fragmentation is proliferating across a growing number of content providers, streaming platforms, media buyers, sellers and verification and measurement partners – while advertisers face more pressure to measure and deliver results while preserving consumer privacy. There’s a lot to juggle.
Here are five predictions for how the future of the channel will shake out, per experts at Advertising Week New York.
1. Hybrid SVOD-AVOD models will take root
While streaming platforms have traditionally offered either premium subscription video on-demand (SVOD) or free advertising-based video on-demand (AVOD) – think Hulu v Tubi – the two poles are converging.
This is due in part to the fact that SVOD, which once reigned supreme, is now facing an uphill battle. Take Netflix, for example. The streaming giant has been bleeding subscribers – even during booms, such as the launch of the new Stranger Things season earlier this year. The company, eager to recoup revenue losses due to subscriber sink, has confirmed it is rolling out an ad-based tier.
Meanwhile, NBCUniversal’s streaming platform Peacock has made it a point to lean into both premium, subscription-based content and free, ad-supported offerings since it launched in April 2020. And it’s paid off: Peacock hit many of its five-year objectives within two years, as it invested in areas that would attract subscriptions, even though its introductory tier is free. These investments span next-day viewing, original content, live sports, special release dates for films and more.
“The future is hybrid AVOD and SVOD,” said Ashley Luongo, senior vice-president of AdSmart advanced TV and programmatic digital sales at NBCU at a panel discussion today.
2. Digital programmatic buying will gain traction
When it comes to media, the streaming ecosystem is looking more and more like digital. The promise of digital ad delivery on CTV is exciting to marketers, who have seen how programmatic-based buying has buoyed – and in many cases even revolutionized – media performance on digital channels.
And programmatic-based CTV buying is certainly on the rise: US advertisers will spend nearly $63bn on programmatic digital video this year, up from about $52bn in 2021, per data from eMarketer.
But experts believe that shifting to more digital-like models of buying and selling CTV inventory requires not only technical but also psycho-social changes. “CTV is still viewed as incremental – advertisers should stop seeing it that way, [starting] today,” said Tom Wolfe, senior vice-president of business development at adtech firm Viant.
A key hurdle to bringing more advertising dollars into the CTV ecosystem, Wolfe said, is the obvious value-adds of linear television. For example, he pointed out, although more than nine in 10 US households can be reached through CTV, the draw of timely programming such as live sports and news is still largely held by linear.
3. The demise of cookies and IP-based targeting will usher in new approaches
As consumer privacy efforts ramp up among both policymakers and tech companies – with Google to ax third-party cookies next year and new data protection and governance laws bearing their teeth – identity-based ad targeting is facing an existential crisis.
“The demise of cookies requires [assessing] the measurement stack,” said Wolfe at today’s session. “IP address targeting won’t be around forever ... and attribution at a census level isn’t a strong solution.”
Instead, Wolfe suggests, marketers should invest in graphs built on multiple identifiers, whether they be deterministic or probabilistic.
At the same time, of course, many experts acknowledge the role that content and context will play in the next era of ad targeting. In the future, context may even enable new types of media buys – like digital overlays on football fields during live games. With IP address-based targeting on its way out, contextual is on its way in.
4. Measurement will rely on peer-to-peer information sharing
With consumers viewing streamed video on multiple screens and across a range of content providers and platforms, perhaps CTV’s biggest challenge is solving the problem of accurate and precise media measurement.
Traditional methods of television ad measurement, such as Nielsen’s panel-based approach, are coming under fire. Advertisers are seeking new solutions.
NBCU’s Luongo predicted that “the future of measurement is peer-to-peer [data] sharing.” As brands invest in their own identity graphs and build out first-party data strategies for the cookieless world, there’s a need for knowledge-sharing in the world of advertising. Data clean rooms will help advertisers make sense of various types of data across consumer touchpoints and analyze media performance with greater accuracy.
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5. Multiple measurement currencies may win out over a universal solution
Another debate playing out within the CTV media measurement conversation centers on the question of various currencies. With the long-held standard of panel-based measurement facing growing scrutiny – and major players including NBCUniversal calling for novel, innovative approaches to measurement (with buy-in from the likes of Publicis, Havas, Dentsu, OMD and Edelman) – the industry has seen a surge of new independent currencies come to market.
Many players – including Nielsen, which has long set the standard for media measurement – are advocating for a future in which media buyers and sellers can transact seamlessly across screens using one, universal measuring stick. (The company has been building its own version of such a currency since 2020, which it calls Nielsen One; YouTube is the first partner testing the solution).
Conversations playing out at Advertising Week New York, however, tell a different story. Many experts believe that CTV measurement of the future will necessarily involve multiple kinds of currencies. “I don’t think there will be or should be a single currency moving forward,“ said Nicolle Pangis, chief executive at Ampersand, a data-driven TV ad sales and tech company.
“Competition, by definition, creates the need to evolve faster,” she went on. “If there was a second Nielsen [type player], they would have evolved more quickly in the way they needed to. I hold that there will be multiple players moving forward. The more players, the better.”