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Media Future of TV CTV

CTV is booming - but will the absence of a unified approach ruin its potential?

By Valbona Gjini | VP, marketing & communications

ID5

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August 4, 2023 | 8 min read

CTV is forecasted to surpass linear ad spend this year, but challenges persist due to lack of standardization and privacy concerns, says Valbona Gjini (VP, marketing & communicaions, ID5). Here she explains why the only way to truly unlock CTV’s potential is through a common currency.

Connected TV aka CTV showing different CTV platforms and services

Connected TV has near limitless potential - but only with a unified approach

Insider Intelligence forecasts that ad spend on connected TV (CTV) will surpass that of linear for the first time this year. While CTV offers incredible opportunities for brands to connect with consumers in innovative ways, there are also significant challenges.

The lack of standardization across CTV providers and the concerns surrounding privacy have been hampering CTV's progress. Moreover, the disjointed integration of CTV into omnichannel marketing strategies adds to the complexity. These hurdles can all be traced back to one fundamental issue – the absence of a common currency to identify users, collect their consent, and activate data effectively on CTV.

CTV's challenges and the need for urgency

While CTV does not suffer from an identity crisis or vanishing cookies, advertisers need to embrace a greater sense of urgency in advocating for the creation of a common currency. Such a currency would foster seamless communication between the siloed CTV platforms, addressing the challenges posed by fragmentation and inconsistency.

“The first challenge that brands run into is that not all CTV is created equal,” says Ana Milicevic, board member and adviser at ID5. “The CTV space is very fragmented, which makes everything from inventory forecasting to frequency capping to interpreting efficacy a recurring issue.”

The absence of a common currency to facilitate seamless communication across platforms has led to a hasty solution. CTV players rely on IP addresses for cross-platform connections, but these addresses fall short in terms of privacy compliance and reliability, providing advertisers with an incomplete view of their investments.

CTV also presents challenges for advertisers who would like to utilize data collected in other channels for CTV activation, which, at the moment, is primarily done through data clean rooms. Companies use different clean rooms, which creates more fragmentation and limits a brand’s ability to scale an audience against a particular publisher. Additionally, if brands have a campaign running across multiple CTV platforms, this does not provide an efficient means for frequency capping and also further inhibits effective measurement.

The promise of a unified CTV ecosystem

To fulfill CTV's promise and bring the digital approach to the space, marketers must advocate for a common currency. Standardization in targeting and measurement would revolutionize CTV advertising by improving communication between platforms and enhancing reporting transparency.

“Linear TV and digital advertising both benefited from standardization of inventory as well as measurement,” says Milicevic. “If CTV is to live up to its promise of effectively serving both above-the-line (ATL) and below-the-line (BTL) use cases, then standardization both on the targeting as well as on the measurement sides is required.”

For brands, standardized CTV advertising would bring clarity to measurement and frequency capping, simplifying the understanding of campaign impact and offering better user experiences through optimized frequency capping. This would lead to more favorable outcomes for both marketers and audiences.

Milicevic emphasizes the importance of an underlying identity strategy to balance reach and frequency across multiple CTV providers: “It’s never great when you’re watching a live sports match and see the same three or four tired ads at every ad break, and this seems to be a rather common scenario. But, the more challenging use case is how to balance reach with frequency across multiple CTV providers. This is where having an underlying identity strategy and solution can really make a difference in ROAS.”

Additionally, a common currency would enable brands to build longer-term relationships with customers. “Think along the lines of sequential campaigns and creative that are triggered by activities in other channels,” said Milicevic. “As consumers shift to spend more time with CTV, the experience and storytelling capabilities of the medium can really begin to shine.”

As CTV platforms proliferate, so do their abilities to independently measure and report on key advertising metrics. “Tech platforms report their own numbers and check their own homework,” says Milicevic. While this may work to the benefit of a CTV platform with inventory to sell, it muddies the waters for cautious marketers.

The path forward to a common currency

Advertisers have a crucial role to play in leading the charge towards standardization. By speaking out and advocating for a common currency, they can ensure that CTV advertising becomes more efficient, transparent, and privacy-compliant. Brands and publishers must work together to scale campaign efforts and optimize ad spend, recognizing that industry standardization is an inevitable step as CTV's popularity continues to soar.

When it comes to establishing a currency for CTV, there's no need to reinvent the wheel. The ultimate aim is to have a versatile currency that not only powers CTV but also extends its capabilities to all the other channels that marketers employ to engage with their audiences.

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Promising solutions, such as universal IDs, have emerged to replace cookies on the web and mobile advertising identifiers (MAIDs) on mobile, offering a comprehensive set of functionalities for marketers. These solutions facilitate crucial tasks like precise targeting, efficient frequency capping, seamless data activation, and accurate measurement while adhering to privacy regulations. The beauty of these solutions lies in their adaptability, allowing for their integration even in environments lacking a common identifier, such as CTV.

By harnessing these existing tools, marketers can unlock the true potential of CTV and other advertising channels, creating a seamless and privacy-compliant ecosystem for reaching and engaging their audiences effectively.

Media Future of TV CTV

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ID5

ID5 provides a comprehensive suite of identification services designed to improve to improve addressability and measurement across all environments.

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