Programmatic Video Meets Connected TV

Tali Brousard-Shimer

Over the past several years, we’ve all been paying close attention to the impressive growth of mobile video and the underlying potential for mobile advertising. Yet in the meantime, connected TV has been steadily marking its territory as the dominant device for video consumption. According to a recent eMarketer report, the percentage of connected TV users in the US will have grown from 47% of the population in 2016 to almost 58% in 2021 – more than 21% growth, and a clear majority of the population. With such numbers, we would expect to see an equally proportionate investment in Connected TV video advertising budgets, but alas.

When taking a deeper look at the barriers to programmatic video advertising for connected TV, we see that despite the abundance of inventory that should be deemed as fertile soil for programmatic video advertising, there is a reluctance of advertisers to invest their budgets there. As the programmatic advertising industry steers toward a more data-driven industry, with decisioning processes relying more and more on targeting and engagement data, connected TV is lagging behind for lack thereof.

In a statement provided by Cedato Chief Marketing and Business Development Officer, Dvir Doron, to eMarketer on their report on Digital Video Advertising Best Practices for 2018, released in February, he points out: “On one hand, there’s a lot more inventory available on connected TV platforms. At the same time, I haven’t seen any improvement on their metrics. The ability to target or segment on these platforms hasn’t changed. And there’s still a trust issue for the actual metrics themselves—the completion, the viewability. Until that trust issue has been resolved, [connected TV advertising is] not going to explode in terms of acceptance.”

Data-driven advertising

So, why is Connected TV lagging behind and what needs to change for them to get back in the race to maximizing video monetization?

For one, targeting and measurement technologies for CTV need to become more granular. With connected TV serving “households” as their customers, there is little indication as to the persona within the household that is consuming the content. As opposed to personal devices such as mobile devices and desktop computers for the most part.

Another issue with connected TV – while usage is on a growth streak and inventory is plentiful, scale is a problem for the same reason that affects targeting. While personal devices are “per capita”, connected TV subscriptions are per household, leaving advertisers with a significantly lower audience count than mobile devices for instance.

New buds of optimism

In summary, CTV holds an abundance of opportunities waiting to be exploited and monetized, offering good branding reach. Until we can recreate the programmatic machine developed to support mobile and desktop ads, in CTV, customer targeting and engagement for brands on CTV will remain more of a guessing game. Yet, in spite of that, since the beginning of 2018, Cedato demand partners have been demonstrating a growing interest in CTV advertising. Advertisers today are looking to harvest the promising benefits of CTV, especially in programmatic buying.