CTV Democratizes a Powerful Medium
TV is a powerful medium for making an impact, as 46% of consumers said they remember ads they saw while consuming CTV (a brand recall rate that’s 39% higher than other channels).
In a CTV webinar, Inside Connected TV: A Marketer’s Guide to Performance Advertising, Joey Leichman, Vice President of Buyer Development at OpenX, explains why, “What’s nice about CTV — and this has been the truth for years — is it’s a leanback environment. People are watching glass on a wall, not looking to immediately change their browser tab, as is the case with a desktop experience. As a marketer, you can make a real impression (no pun intended).”
Television advertising is typically expensive, and in the past, largely due to the minimum quantity marketers were required to purchase in order to play ball, which means only those brands with the deepest pockets have been able to afford it. CTV has changed that equation in important ways. While TV advertising is still expensive, it is fully addressable, enabling marketers to home in on their audiences and drive campaign performance. Moreover, they don’t need to splurge on huge inventory buys. .
What are the costs for advertising on TV? According to S&P Global, “CPM pricing against adults 18 and older for the traditional prime-time upfront for the 2021-22 TV season rose 19.4% for broadcast networks to an average of $45.03, up from an average of $37.71 for the 2020-21 upfront.”
Buying outside of the upfronts, CPMs for broadcast and cable linear TV ads fall in the $10 to $15 range, while CTV ads are considerably higher ($35 to $65). Where do the cost efficiencies come in
Linear TV relies on the old-fashioned currency of Nielsen panels and gross rating points (GRPs), which are largely “spray and pay” buying models. CTV, on the other hand, offers more flexibility. Sophisticated targeting allows marketers to hone in on their ideal audiences, and instead of upfront buys, they can optimize their CTV ad spend throughout the year. In other words, you don’t need to choose your audience in January and hope they’re still your right target marketing in July.
Programmatic is revolutionizing the way CTV inventory is traded, and the amount in inventory available programmatically is increasing every year (it is predicted to grow nearly 40% in 2022, which follows an 82% lift in 2021). The abundance of inventory gives marketers the opportunity to test a publisher, show an audience, measure the impact, and iterate targeting criteria based on results. There’s simply no need to take big bets and hope for the best, which further democratizes TV advertising.
“CTV is a beautiful environment. You can use campaign performance data to understand where you’re seeing the best results [and] perhaps where you’re seeing the worst results, and you can calibrate from them,” explains Leichman.
That real-time campaign data also means that CTV isn’t just for brand awareness or top-of-the-funnel campaigns; many brands are successfully launching CTV performance-based campaigns.
A Growing Pool of CTV Inventory
There’s no doubt that subscriptions to ad-free streaming services skyrocketed during the pandemic, which also coincided with the streaming wars, but now that consumers are returning to in-person entertainment, many are opting to downgrade to ad-supported options, which AdAge called “TV Disruptor for 2022.”
Deloitte Global agrees, predicting that service cancellations will top 150 million this year. Not surprisingly, GroupM anticipates that CTV budgets will double over the next four years.
And the opportunities to reach consumers in the CTV universe are growing. In addition to the household names — Hulu, HBO Max, etc. — marketers can opt to advertise via any number of niche services, such as Crunchyroll, Midnight Pulp and many others. In fact, there are over 300 OTT [over the top] services in the US today.
OpenX: Gateway to Scale
OpenX is the largest people-based ad exchange in the ecosystem, connecting marketers to 2,500+ CTV publishers spanning news, sports, cooking, families, movies and more. Each month, we see over 50 million CTV devices and 250 billion ad impressions, all of which are fully addressable (meaning you can target specific audiences as you can with display or mobile campaigns).
What’s more, with OpenAudience you can integrate your first-party data or any pre-built audience segments, and seamlessly match to our identity graph of more than 200 million unique people.
Best Practices for CTV Campaigns
- Reach. The first issue to consider with your CTV campaign is reach. Yes, CTV has ample scale, but keep in mind that some inventory is set aside for upfronts and private deals. Some buyers will need to consider the tradeoff between reach and precision when executing their buying strategy.
- Bidding Floor Prices. While CTV is considerably less costly than linear TV, it’s definitely more expensive than the display and video campaigns you’re accustomed to. You’ll need to think about your floor price and to balance that with your goals for scale.
- Consider Private Marketplaces. To a large degree, CTV is driven by PMPs. “If you’re thinking about CTV, whether it’s for performance reasons or branding reasons, you may be better off with a PMP as opposed to waiting in the open exchange for enough CTV inventory to waterfall down to you,” notes Leichman.
- Bring Your Data. CTV is as data-driven as every other digital channel; you can leverage your first- and third-party data for targeting. If you partner with a universal data provider, such as LiveRamp or Acxiom, you can use that data as well (OpenX’s ID graph works with all data).
- Rethink Currencies. Traditional TV was all about targeting content and genres, based on assumptions as to who watched particular shows. How important is that in CTV, where everything can be tested, measured and optimized?
Watch the Webinar
Want to learn more? Check out the joint OpenX/M&C Saatchi–hosted webinar, Inside Connected TV: A Marketer’s Guide to Performance Advertising on CTV.
Interested in launching a CTV campaign? Contact firstname.lastname@example.org.