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Personalized Connected TV Ads: Digital Marketing’s New Frontier

For the longest time, marketers have been reluctant to give up TV advertising, despite it being very expensive, not very precisely measurable and TV viewership continuing to decline. Despite the tremendous targeting, personalization and measurability of digital advertising, it is only in the last few years that digital advertising has finally surpassed TV.

Digital media platforms finally may have concluded that “if you can’t beat TV platforms, join them.” So, many years ago, the idea of connected TV came about. For years, Connected TV (CTV) was fraught with a lack of good content: TV and cable carriers were paying so much to the production studios that the studios generally refused to make that content available to OTT and CTV providers for fear of upsetting the TV and cable companies. Furthermore the studios themselves had a stranglehold on quality TV content that was hard for anyone else to replicate.

Over the last few years, all of this has changed. Video content production has scaled up significantly. Think of TikTok as being at the extreme end of that spectrum where 10-yr olds can whip out their phones and record content that is getting millions of views and producing a generation of rich kid video producers and the made for streaming TV shows on Netflix and Amazon at the other end of the spectrum.

The rising popularity of streaming platforms like Hulu (started by the studios themselves as one of the earlier attempts to address the demand for digital TV content), Netflix, Amazon, Youtube, Disney+ etc. has given rise to massive audiences, which in turn funded large budgets for content and online-only TV shows. 

CTV struggled initially from two key issues. The first: scale. It was a vicious cycle of not enough quality content, leading to poor viewership, leading to lack of TV-like production budgets to produce digital content. The second: digital marketers wanted the kind of addressability that other digital platforms were providing -- display ads, social media ads, native ads etc., all of which provided precise targeting and measurement capabilities. Despite issues with fraud, viewability etc., digital media budgets continued to grow significantly but avoided investing in CTV as the same level of addressability was missing.

Fast forward a few years and two key things have happened. Consumer behavior changes have pushed CTV ahead significantly.  Baby Boomers mostly watch traditional TV. Millennials watch some TV, but more so on digital devices and now GenZ-ers hardly watch linear TV.  A recent report by Freewheel says CTV viewers are a whopping 23 years younger than typical traditional TV watchers.  Following the model of audience demand leading to more content leading to more viewership, CTV finally has gained scale and addressability, both of which are critical to draw digital budgets.  COVID accelerated this pace. Most of us switched to streaming TV shows as a key form of entertainment when we couldn’t go out to sporting events, trips outdoors or even on vacations.

CTV, unlike traditional TV, still has a hurdle in that many streaming platforms like Netflix, Disney and Amazon took the subscription-based route - closing the doors to advertisers and favoring the more predictable subscription revenue. Still Hulu, Peacock, Roku, Pluto and others offer ad supported models for advertisers, which promise to provide the kind of scale TV provides even today.

For Marketers, the key allure of CTV is its addressability and the ability via Dynamic Creative Optimization (DCO) platforms to personalize ad content to precise audiences and households. This provides a significant breakthrough for advertisers because, unlike traditional TV advertising, CTV gives digital marketers all of the benefits of digital advertising (i.e. targeting, measurability) and significantly more benefits of better viewability and brand safety.

Personalization of video content though has traditionally been a very expensive and time consuming process, using traditional methods and processes to produce personalized video content can be budget busting and often rendered impossible by the heavy lift required.

Dynamic Creative Optimization (DCO) and ad personalization platforms have advanced significantly in video capabilities to a point where some platforms can generate hundreds and thousands of video ads from single master templates and deliver them with precision to CTV audiences.

Some examples are auto brands showing the location of your local dealer, special regional financing offers etc.  Retailers are able to show relevant products, offers and store locations specific to where you live.

These capabilities add a very significant channel for brands and may indicate l tipping marketing budgets to significantly more towards digital spend than traditional media with the addition of CTV as a key digital channel.

The digital marketing ecosystem needs to evolve significantly to take advantage of these capabilities. In addition to DCO platforms evolving to deliver precise dynamic creative, DSPs like The TradeDesk, Simpli.Fi, Tremor Video and others have invested heavily in making CTV inventory available. Data Providers like Alphonso, Samba and others provide data for precise targeting, and identity and measurement platforms like Liveramp and Oracle Moat are starting to provide better measurement of delivery and engagement.

It's clear that CTV has arrived. But to take true advantage of its main value proposition over linear TV ( i.e. addressability), ads must be personalized to ensure we simply don’t deliver the same one-size fits all TV ads to CTV viewers. Not personalizing and precisely delivering CTV ads would be a very significant missed opportunity.

 

July 20th, 2021

 

By Diaz Nesamoney

Diaz Nesamoney is an accomplished technology entrepreneur who founded three successful technology companies all harnessing the power of data to power enterprise and consumer applications. Currently Diaz is Founder, President, and CEO of Jivox, a company that provides a technology platform for data-driven personalized advertising and marketing. He was previously Co-founder, President, and Chief Operating Officer at Informatica (NASDAQ:INFA), which he took from a startup to a publicly traded company in 1999. Informatica pioneered data integration software as a category and is now the market leader with more than $1 billion in revenue and a $5 billion market capitalization.

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