The evolution of Connected TV (CTV) advertising has prompted its expansion and proliferation, and we are at the beginning of a major shift in the advertising landscape. The move to CTV is akin to the shifts caused by the advent of pre-roll video advertising in the early 2000s. Pre-roll advertising flourished as the media landscape fragmented, content became far less expensive to produce, broadband became accessible to homes across the country and usage of personal computers surged among all age groups. In response to the growing popularity of online video content, advertisers had an opportunity to engage audiences before they got to the content they sought as they surfed the web.
Sound familiar?
In the nascent days of pre-roll, the limited amount of available video content forced buyers to execute reserved media buys through insertion orders with each individual publisher. It was a time-consuming process for buyers. In addition, depending upon the universe size, the pursuit of this high–demand, yet scarce, premium inventory often subjected their advertisers to overexposure and wasted ad spend.
In a few short years, online video was ubiquitous, and impressions were being generated across a wide breadth of publishers. Content was increasingly on-demand, and the definition of “premium” became more subjective. For example, if someone was willing to seek out a particular video to watch, that piece of content had inherent value. However, even as the amount of premium content grew, publishers did not always have scale.
By the early 2000s, significant strides in ad technology empowered buyers to purchase defined audiences across thousands of websites – and on different device types – within a single campaign. Gone was the lengthy and laborious process of exclusively using a site’s ComScore audience makeup to draw comparisons between their audience and the advertiser’s audience before concluding that the two were similar enough to execute an ad buy.
And the benefit of buying audiences using data-driven segmentation was the promise of efficient delivery of pre-roll advertising at scale. Sure, there was still a place for up-front and reserved placements on a handful of top–tier publishers, but the new standard rapidly came to supplement those buys with a programmatic buying strategy. This allowed buyers to reach better-defined and increasingly niche audiences that were suddenly available to them en masse.
Today, we find ourselves at a similar point as CTV advertising has taken the concept of video further by capitalizing on the rise of streaming platforms and the far-reaching adoption of smart TVs. Together, they offer advertisers a diverse range of on-demand content. The market for smart TVs was at a fever pitch in 2022 and early 2023, so CTV advertising is expected to increase by 13% globally by the end of this year.
Significant strides in ad tech beget similarly significant shifts in the way buyers approach their strategy.
Here’s how. An all-reserved, “premium” CTV media–buying strategy has advantages and can be effective in reaching engaged audiences and driving awareness. However, as more money is directed toward streaming, demand for top-tier CTV from all marketers will continue to rise. Inventory will need to be secured early and will require disparate buys across numerous publishers to achieve the necessary scale and reach.
Additional challenges of an all–reserved, tier–1 CTV strategy can include:
- Limited Inventory: “premium” CTV inventory can be limited and in high demand, making it difficult to secure placements at scale.
- Lack of Flexibility: an all-reserved media buying strategy can be less flexible than other buying methods, as inventory is locked–in upfront, limiting the ability to pivot or make real-time campaign adjustments.
- Limited Targeting: options for targeting on CTV can be limited compared to other forms of digital advertising, making it challenging to reach specific audience segments.
Political marketers are mindful of changing demographics identified in 2020 Census data and the pandemic’s impact on geolocation. They also understand how each news cycle holds the power to change the American psyche: our sentiments, our behaviors, our values. Even a minor shift in the demographic or beliefs of the electorate now can be the difference between a win and a loss.
For these reasons, history is positioned to repeat. Using 1st– or 3rd-party data for programmatic CTV buys will become the norm for the 2024 cycle. Similar to the evolution of pre-roll, strategists will become increasingly comfortable with programmatic CTV as the format matures, recognizing its power to supplement reserved buys and combat these new challenges.
This shift is already starting to take effect, as the 2022 midterms saw the format of video content account for 68% of all digital advertising dollars spent during campaigns. The powerful combination of data-rich digital targeting in a linear TV experience allows political advertisers to target voters not only by registration and known (or modeled) political affiliation but also by voter positions on hot-button political and social issues that drive the ballot decisions they make. This segmentation strategy also can also increase a message or idea’s relevancy by aligning it with the beliefs, behaviors and values of the CTV viewer. Powerful stuff.
Data-driven audience buying provides an additional set of unique advantages, including:
- Better targeting: by leveraging data-driven audience buying, advertisers can identify and target specific audiences beyond traditional demographic or geographic targeting, resulting in more precise, impactful and efficient ad delivery.
- Improved ROI: real-time optimization and measurement of campaign performance, which can improve ROI and ensure that advertising dollars are being spent efficiently.
- Greater Scale: a wider range of inventory beyond only the most well-known apps and channels, allowing for greater scale and reach. On-demand programming means it’s prime time all the time.
- Flexibility: data-driven audience buying provides more flexibility than a reserved buying strategy, as advertisers can adjust targeting, pacing and budget allocation on the fly to optimize performance.
- Reduced Ad Fraud: demand-side platforms have built-in fraud detection measures that can help reduce ad fraud, ensuring that advertising dollars are spent on legitimate placements.
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By pairing a reserved CTV buying strategy with the flexibility of a data-driven audience–buying strategy, advertisers can leverage the best of both worlds: the benefits of premium placements with the targeting and familiar optimization capabilities of programmatic digital.
The data selected for targeting these buys, however, remains the key to reliably elevating the relevance of the impressions to its intended audiences. Until recently, the marketplace was surprisingly late in asking about data quality.
The demand for quality data and message personalization – whether through CTV or another channel – will only grow and will have huge implications for campaigns heading into 2024. If you are relying on traditional sources, you will miss out. For years, Resonate has been focused on creating and optimizing a massive, scaled data set that is representative of the US voting population rather than just throwing predicted attributes out into the marketplace.
Can your data provider say that?
