With the rapid migration of audiences to CTV platforms just as CTV paid and ad-supported channels have exploded on the scene in 2020, both viewers and advertisers are further challenged.
Consumers can see the same ad over and over again—or not at all. Advertising buyers encounter powerlessness in managing frequency, creating a mix of overexposure to some and severe under-delivery of ads to large chunks of viewers. Three key dynamics contribute to this imbalance:
- Fragmentation of CTV buying options, and a Walled Garden sales approach pushed by the largest CTV providers.
- Slow movement toward cross-platform ad measurement and tech that would allow for better cross-platform frequency management.
- Unbalanced supply and demand due in part to pandemic-driven growth of OTT and advertiser distrust of the CTV ecosystem to track and report fraud-free executions.
Here are some of the latest developments with reach and message frequency in CTV and OTT, as well as some insight into what ad tech could be doing to solve these challenges:
CTV Walled Gardens
The Wall Street Journal quotes industry executives who say increased advertising won’t solve the problem of too many ads repeating until a universal ID solution is established. And that is unlikely due to content providers’ insistence on walled gardens.
This creates an over-reliance on using DSPs (Demand Side Platforms) to buy across platforms, yet without a universal ID or other cross-platform measurement solution, it is impossible to know the frequency distribution for a multimedia budget plan or to measure it post-buy.
Some of the established ad-supported streaming services like Hulu (Hulu also offers an ad-free “Flix” version) are doing a fair job within their systems of providing frequency capping as more advertisers come on board.
What Should Ad Tech Do? Ad tech can continue to refine the basic technologies of ad delivery (Addressability, Viewability, DAI (Dynamic Ad Insertion) and ACR (Automated Content Recognition) for CTV within platforms while supporting development of cross-platform measurement tools beyond walled gardens.
There was a time when cross-media measurement was possible, if not easy or perfect using Gross Rating Points (GRPs) where each point represents 1% of the target population. Reach was expressed in unduplicated GRPs, while duplicated GRPs took into account frequency of message exposure.
That left a simple formula: Reach x Frequency = Total GRPs which because they were duplicated could exceed the 100% of the population. For example, a media plan might reach 86% of the target population an average of 4.7 times in a flight for a total of 404 GRPs. Deeper research produced frequency distributions (see part 1 of Reach and Message Frequency in CTV and OTT for an example) so advertisers could manage both reach and frequency.
There is movement from the advertiser side and through industry associations to push for cross-media measurement and technologies and guidelines for creating it for the CTV age.
The ANA (Association of National Advertisers) has been pushing hard, joining a global cross-media measurement coalition and is behind the 2020 CIMM (Coalition for Innovative Media Measurement) cross-media measurement manifesto. The timeline for success is foggy.
In December, Nielsen announced a plan for “a single cross-media solution to drive comparable and comprehensive metrics across all platforms” by the end of 2024. Whether that will be enough, and still relevant in four years is a big question, but definitely one worth keeping track of.
What Should Ad Tech Do? Ad tech must contribute to, step up and participate in these initiatives in order to keep the advertiser marketplace healthy, and to keep walled gardens from driving media consumers to ad-free, subscription CTV platforms—what TVREV Co-Founder and Lead Analyst, Alan Wolk, calls “Flix” services.
Supply and Demand
There has also been an explosion of AVOD (Advertising-supported Video On Demand) and FAST(Free Ad Supported T/V) services since Covid-19 restrictions kicked in. Meanwhile, traditional cable TV subscriptions are rapidly declining.
What Should Ad Tech Do? Ad Tech can’t do much about supply and demand, however they are key players in supporting the initiatives led by the buy-side to stand up to and solve the problem of proprietary walled-garden protectionism on the supply-side.