The TV media world has made headway dramatically in recent years. And the main merit lies in implementing CTV services to promote businesses. Connected TV is rapidly becoming a part of the overall TV advertising market share.
According to the study by the Leichtman Research Group, the CTV penetration rate in the US has significantly increased. In 2022, 87% of US households own at least one internet-connected TV device. This explains the willingness of householders to experience a better watchable environment with smart TVs and raises the refusal of traditional cable channels.
Connected TV has become a precious environment for publishers and advertisers to deliver their video ad content and improve their marketing planning. But on the other hand, they met a range of challenges that result in significant losses for brands and ad companies. Why does it occur within the CTV space? How do industry players struggle against these challenges? About this and more, you will find out in this article. Read on.
Why are connected TV companies sought-after in the market?
Connected TV companies are gaining popularity due to embedded data-driven programming in strategic planning. Due to the inventory, industry players can enhance their brand recognition, provide a more accurate audience targeting and increase customer engagement.
With the emergence of programmatic advertising, many TV providers have turned their focus from linear to connected content streaming. The gradual appearance of “cord-cutters” on the horizon explains such a switch. The TV companies have also changed their strategic planning in accordance with the programmatic CTV.
Connected TV advertising companies can help publishers and advertisers with an in-house analysis of CTV services as well. TV ad companies can provide good assistance on how to estimate the effectiveness of a campaign, and take valuable solutions to generate a good ROI. They utilize a range of tools and metrics to deliver improved viewability, precise targeting and generate decent revenue.
Challenges forcing connected TV companies to reboost their marketing models
Along with promoting CTV advertising, ad scams and fraud are on the rise in the streaming segment. It brought great difficulties to connected TV companies, brands and advertisers as they cannot properly manage their campaigns, and the challenges impoverish their marketing.
Alongside the CTV improvement in the global market, the Q1 2022 Global Connected TV (CTV) Ad Supply Chain Trends report discloses the current challenge. It is about invalid traffic (IVT) that is over 20 % on an open programmatic CTV advertising in the first quarter of 2022. This percentage of the issue can be caused by some of the following points:
- Ad fraud
This is one of the most frequently appeared issues in the advertising space. This type of fraud can take various forms and shapes. They are, for example, click fraud, affiliate fraud and fake leads. The first is associated with the deployment of bots, malware programs and click farms to manipulate the performance of an ad campaign.
The second fraud relates to domain spoofing and cloning to redirect traffic to a scam website. According to the third way of fraud, scammers use a company’s methods to get new leads. So downloading a company’s resources or filling out forms might also retarget to a scam landing page.
- Intermediaries and fees
Many advertisers and publishers approach CTV experts to supply their ad campaigns. Thus, they collaborate with an intermediary that charges additional fees for their work. If there is more than one intermediary, the fee rate might increase which can eat up a great portion of a supplier’s revenue.
- High market fragmentation
This challenge has become significant for publishers in the CTV space. Each platform applies its own algorithms to categorize and deliver the content to a target audience. The number of such platforms and their embedded fragmentation can affect visibility and targeting accuracy. To avoid this issue, it is recommended to adhere to one platform or network.
- Issues with measurement
In CTV advertising, various devices and software are used to stream the content as well as to measure the effectiveness of every ad campaign. Each device or software has its own ID, and it is almost impossible to unify a standard for accurate measurements and reporting across the industry.
One of the crucial factors for marketers to solve this issue is cross-channel attribution. This tool helps them build a standard attribution mechanism that will lead to transparency and solid monetization.
What do media suppliers do to improve their ad marketing?
Media suppliers not only comprise the CTV in their media planning but are also willing to reorganize their internal structure to support this inventory.
According to the new Forrester survey, half of 300 US interviewed marketing leaders want to keep control of their media advertising. Such an objective is motivated by a list of demands they noted:
- Greater transparency;
- Control over data;
- Assurance in compliance with privacy regulations;
- Have access to campaign metrics;
- Manage money flow wisely.
On the other hand, they cannot reach it because of a lack of knowledge, resources, and unwillingness to transform their marketing model. But still, this challenge exists, and marketers need to develop an insightful solution to manage their advertising strategy.
Referring to the Forrester study, 90% of marketers expect to have some responsibilities over all areas of media, and 64% intend to bring their connected TV capabilities in-house gradually. The study also emphasized particular ad segments that brands and media companies are willing to manage directly. They are social, CTV, and other programmatic advertising opportunities.
Solutions to bring media services in-house
Considering the challenges occurring in the ad media segment, companies might resort to defining two solutions to keep control over their campaigns. The first one involves the participation of third-party software. This tailored program incorporates various data and analytic tools that help cover any gap in knowledge and resources. So the company provides this process through its own efforts by expanding its team of experts.
The second one is reaching out to specialized ad organizations that will take the most responsibility to promote a company’s brand and products. In this case, a company will spend more money for paying for additional services. It won’t have 24/7 access to its campaigns directly.
Most marketers are committed to providing CTV services in-house that allow them to manage the overall process at each stage. But, of course, a company needs to dispose of analytic experts who will calculate and estimate the outcomes of ad campaigns. They come to use particular technologies to measure the efficiency of advertisements.
Key analytical tools in estimating an ad campaign
Analytic tools are crucial in handling the measurement of TV services, no matter what in-house solution is selected. Among them are specific techniques to access raw data located around online video ads, various metrics to measure the ad campaign effectiveness and others. But it makes sense to mention such an instrument as attribution tracking. Why is it so essential in marketing planning? Let’s figure it out.
Attribution helps advertisers disclose what customer action led to purchasing a product or service. This allows marketers to analyze their strategy and adjust their ad campaign in order to consolidate the spot influencing most customers’ decisions to purchase.
In CTV advertising, publishers discover more opportunities to scrutinize a campaign by receiving automatically detailed measurements. This can be achieved by the use of a specific data-driven platform, SDK integrations and tracking pixels. These tools enable marketers to take stock of viewer engagement levels and consider particular customers’ actions that result in conversions.
Overall, attribution in a connected television environment brings the following benefits:
- More information on TV consumption and viewer behavior;
- Identifying new target viewers;
- A better understanding of TV commercial performance from the perspective of frequency and efficiency;
- Discovering partners that operate best in accordance with KPI;
- Optimizing targets to improve ad campaigns and make them more effective.
When discussing attribution, it would be wrong to skip such analytical tools as ROI and ROAS. They might seem equal, but they do have a difference.
ROI stands for a return on investment. This metric allows both advertisers and marketers to estimate the profit of an ad campaign if it is worth investing in. When calculating ROI by using the appropriate formula, all marketing expenditures are considered, including additional spending.
ROAS signifies a return on ad spend. It helps a company measure each ad campaign’s effectiveness, i.e., the value per dollar of ad spend.
Accordingly, to improve an ad campaign in the CTV space, an industry player should consider attribution tracking and the above-mentioned metrics ROI and ROAS. When exploring the viewer behavior and studying their conversion actions, it is possible to increase ROAS and ROI.
With the emergence of ad frauds in the CTV landscape, many companies started to look for insightful solutions to avoid losses that affect their budget. The thought of bringing media services in-house has appeared due to marketers’ desire to monitor their media advertising directly.
Accordingly, a company must create an internal team of qualified employees specializing in analytics and digital advertising. By doing this, a company will only gain more according to the benefits in-house integration discovers:
- Transparency in marketing planning;
- Overall data control;
- Providing security of the first-party data;
- Measuring an ad campaign at any time;
- Adjusting the marketing model according to viewer engagement;
- Advice on implementing certain metrics, including attribution;
- Counseling on improving ad campaigns;
- Assistance in team development.