February 8, 2022

Targeting Opportunities for Connected TV

How it works and why it's a success

Connected TV (CTV) has become the norm offering many opportunities for new ways of targeting. In this article, Country Manager Netherlands Erik Dubbedelman explains why and how targeting with CTV works differently from other forms of video advertising, what can still be improved in terms of regulation, and why it's already succeeding.

Once upon a time, Connected TV - watching video content on-demand via an Internet connection on a large screen, for example on the 'regular' TV in the living room - was the "new kid on the block", but looking at the many trend articles published in recent weeks we may well conclude that CTV is fast becoming an integral part of the video strategy of many advertisers. It is therefore time to understand the mechanisms and targeting possibilities of CTV and the differences from "regular" video campaigns.

CTV has long ceased to be a trend

After years of being portrayed as a "trend," changing viewing behavior and technological advances have now (finally) ensured that the smart TV is well established in connected living rooms than ever before. Consumers are watching less and less TV at regular broadcast times: they decide what content they want to watch and at what time they want to do so. In the United States, which is often a good reference for future European developments, nearly 9 out of 10 people stream video content via CTV. Of these CTV viewers, a primarily younger and typically harder-to-reach audience, 91% views the ads shown around these online videos.

Connected TV creates a common viewing experience

Although European market penetration is not yet as high as in the United States, Europe is currently a rapidly growing market for CTV. In Europe's five largest markets, 50% of all households have a TV in their home on which CTV is available, which amounts to 61.5 million households that you can reach as a brand. What is further notable is that this TV is often in the living room of most households, which ensures that CTV is usually a common customer experience. And it is precisely this "small" detail that makes a CTV strategy different from a regular online video campaign.

CTV contextual targeting

Unlike regular online video campaigns that primarily use first- and third-party data to target, the common use of CTV makes it recommended for advertisers to apply contextual targeting. This is because contextual targeting does not work with users, but with user groups, which are identified by the specific content of the website they are visiting at any given time.

This data is then combined with additional properties that are not directly connected to the user, for example, device, operating system, browser, and search behavior. Users' privacy is thus fully respected, while they are shown ads whose content is fully aligned with the website and individual ad performance, which is based on their historical data.

Different platforms, different KPIs

Not only is the method of targeting different from regular online video campaigns, but the measurement of results also differs slightly. When it comes to metrics, it is not technically possible to measure click-through rates (CTR) in CTV. And that's a good thing if you ask me. After all, it is not for nothing that CTR is increasingly seen as a false economy metric.

Personally, I'm more in favor of view-through rate (VTR), something that previously wasn't technically possible on CTV, but now more and more providers are offering viewability pixels. In addition, several alternatives have been launched in recent months, including attribution using IP address matching and incremental reach measurement, which already provide clear insight into the effectiveness of CTV campaigns.

More regulation is needed

As the (technical) possibilities of CTV become clearer and the potential continues to grow, the most important need now is for the industry to work with industry associations such as the IAB to develop scalable and uniform solutions and standards for CTV. Indeed, currently, the VAST standard is most used, but it does not meet the advertiser's requirements in terms of verification and fraud prevention.

Furthermore, it is especially important to have more clarity around managing the consent. Or in other words, how is permission asked from the user? Currently, two different approaches are used. The hardware manufacturer asks for permission when consumers install their device for the first time or open the CTV user interface.

But it may also be the case that service providers take on the consent portion. And then there is ambiguity about who owns all the inventory. In the CTV environment, it is not only the content developer or broadcaster that owns it, the hardware manufacturer, the app, or even the channel-scheduling platform may also have a stake. It is therefore becoming more important for all players to adhere to industry frameworks, such as app-ads.txt, to make the market clearer - and help regulate it.

Standing out among screaming banners and YouTube hypes

Although the details have yet to be finalized, the (technical) possibilities and potential of CTV are enormous. At its core, CTV is ultimately TV advertising with digital possibilities. Where advertisers used to have to think about how to create video ads that have a big impact on smaller screens, the big screen lends itself to an immersive experience. In a world of blaring banners and YouTube hypes, as an advertiser, you can finally run campaigns again that are considered a breath of fresh air and generate results you can only dream of with regular video campaigns.

G-Star already dared

In a previous article published for Emerce, I went through how G-Star, through the use of CTV, was able to achieve a 30% higher ad recall compared to programmatic video advertising and YouTube. And thanks in part to the use of CTV, G-Star managed to reach more than 6.6 million unique users, with only a 3% overlap in unique reach between YouTube and the use of programmatic video advertising.

Even when I look at the European figures of our own ShowHeroes group, I see that the VTR of more than 11 million ad impressions we generate per month is above 90%. And the great thing is that G-Star didn't have to flip their video strategy at all for this, only the mindset and the KPIs were adjusted. I am curious to see who will follow in the coming year.


Read the original article in Dutch on emerce.nl.

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