What’s the Future of Advertising on Connected TV?

By Sandy Drayton  | 

January kicked off with the annual Consumer Electronics Show in Las Vegas. This year saw a range of product announcements related to Connected TV, including new types of devices and new user interfaces. In fact, this may be the year  CTV reaches “critical mass,” with some sources estimating 60% of US households now own a connected TV device like a smart TV, Roku or Apple TV.

But despite these exciting new product launches and growing consumer penetration, ad spending on connected TVs has been low, accounting for just 1% of US ad spending. Why? Here are three factors that will need to be addressed in order for connected TV advertising to break into the mainstream:

A Standardized audience measurement
Given the similarity to traditional TV, it might seem like connected TV audiences could be easily measured much like their counterpart. But as it turns out, there’s currently no standardized audience measurement like the “GRP” for connected TV devices. On top of this, leading publishers for Connected TV often don’t have the kind of data on audience psychographics and demographics that would encourage further media investment.

Better targeting and segmentation
Related to the point above, it’s also difficult for advertisers to keep track of individual users on connected TVs, which complicates campaign targeting and segmentation efforts. That’s because typical tracking technologies like cookies and device IDs simply aren’t set up for connected television. So far a number of sample-based measurement solutions have been proposed, though none of them offer the level of granularity that advertisers have come to expect from other digital ad formats.

A Means of Measuring Ad Effectiveness
Attribution is another critical component of today’s digital campaigns, and most digital ad formats allow buyers to track their “KPIs” in real-time as the campaign is live. But despite the fact that connected TV advertising is delivered digitally, advertisers today still can’t use many of these tools. Expect to see the measurement options improve as new technology like interactive TV makes headway, and as publishers figure out ways to better track individual connected TV devices.

CTV has finally reached the mainstream with consumers. But based on the current state of the connected TV ad ecosystem, it’s not quite there yet for advertisers. Expect to see a concerted effort by publishers and advertisers alike as the industry works to “crack the code” on measuring and identifying the audiences that are flocking to this emerging ad format.

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