Connected TV (CTV) advertising is like a brilliant but slightly flawed diamond in the rough. It has immense potential, but it’s grappling with challenges that need to be polished away. Issues like measurement standards, fraud, and disjointed integration with other channels hinder its growth. Advertisers are demanding more direct connections, better protection, and seamless integration within the omnichannel landscape. Despite these hurdles, CTV’s trajectory is promising. As the industry addresses these challenges and refines its approach, CTV has the potential to shine as a dominant force in advertising, captivating audiences with targeted, engaging, and measurable campaigns across the connected TV ecosystem. It just needs a little more TLC to reach its dazzling full potential.

The rise of connected TV (CTV) as a popular viewing platform has brought significant attention to its advertising potential. However, despite the hype surrounding CTV, the industry is still grappling with several issues that hinder its growth and maturity. In this in-depth article, we will examine the key challenges faced by CTV advertising and explore the potential solutions that could reshape the marketing technology landscape over the next few years.

Measurement Challenges and the Need for Direct Connections:

One of the primary obstacles that CTV advertising must overcome is the lack of comprehensive measurement standards. While advertisers recognize the digital power of CTV as a marketing channel, the market has yet to deliver the transparency, precision, and audience data needed for effective optimization at scale. The current landscape is plagued by opaque reselling practices, fraud, and inventory confusion, with CTV ad fraud schemes increasing by 70% between 2020 and 2021, resulting in an estimated $140 million loss.

To address these challenges, advertisers are increasingly seeking more direct means of buying CTV inventory, reducing the number of intermediaries and establishing transparent relationships with publishers. This trend is evident in the growth of upfront CTV ad buying, which is expected to exceed $6 billion this year, accounting for a significant portion of total CTV video ad spending. However, it is crucial to note that this surge in upfront spending is a reaction to the current limitations within the CTV space, and advertisers will likely pivot towards more targeted and nimble buying approaches as CTV data becomes more precise and actionable.

CTV’s Place in the Omnichannel Equation:

Another critical factor shaping the future of CTV advertising is its integration within the larger omnichannel ecosystem. Advertisers expect CTV to seamlessly integrate with their digital and mobile channels, providing a holistic view of their marketing efforts. Currently, CTV operates in silos, disconnected from the broader digital planning, buying, measurement, and attribution cycle. To reach true maturity, CTV must demonstrate its ability to integrate with other channels effectively.

Advertisers are increasingly looking for opportunities to buy CTV inventory in a way that considers their efforts across various digital channels while maintaining a direct connection with publishers. The future of CTV buying will be integrated and direct, enabling advertisers to maximize ROI while ensuring a cohesive advertising strategy across platforms.

CTV’s Growth and the Need for Enhanced Protection:

As CTV advertising continues to grow, it also becomes a prime target for fraud. Advertisers are projected to spend nearly $24 billion on CTV advertising this year, presenting ample opportunities for fraudsters to exploit. CTV ad fraud involves deceptive tactics that inflate video ad impressions, costing advertisers significant amounts of money. In 2022, bot fraud on CTV surged by 69%, and the number of CTV fraud schemes detected has tripled since 2020.

To combat fraud and ensure campaign efficacy, constant protection and verification are crucial. DoubleVerify’srecent Global Insights Report highlights the need for continuous protection to tackle quality issues and emphasizes the importance of attention-based metrics. The report found that unprotected advertisers experienced a fraud rate of 11.2%, compared to just 0.6% for protected campaigns, demonstrating the significant risk for advertisers operating without proper verification measures.

Attention-based metrics are also gaining traction as advertisers seek to optimize campaign performance and enhance ROI. DV’s Authentic Attention® measurement provides impression-level insights that go beyond mere viewability, allowing advertisers to understand the impact and resonance of their ads while benchmarking against industry standards. Attention metrics provide valuable data for evaluating performance and informing future advertising strategies.

Why CTV Will Never Go Open Exchange:

While programmatic buying has become the norm in digital advertising, the transition to a fully open and automated buying landscape for CTV is not inevitable. Unlike digital advertising, CTV inventory is limited and concentrated within a few major publishers, making direct sales channels more favorable for both publishers and advertisers. Streaming networks are increasingly moving away from programmatic platforms to maintain control over their premium content and ensure a positive viewer experience.

The scarcity of premium CTV inventory means that advertisers often prefer direct relationships to secure inventory at scale, rather than relying on exchanges that limit the available inventory. Additionally, direct relationships allow for more integrated ad experiences, particularly with larger CTV players. The shift towards direct buying channels aligns with the preferences of publishers and advertisers, ensuring transparency, control, and the preservation of the audience viewing experience.

Connected TV (CTV) advertising holds immense potential, but it still faces significant challenges that must be addressed for the channel to reach its full maturity and value. Measurement transparency, direct connections, and protection against fraud are crucial areas that require improvement to instill confidence in advertisers and maximize the effectiveness of CTV campaigns.

Furthermore, integrating CTV within the larger omnichannel ecosystem will be essential to provide advertisers with a comprehensive view of their marketing efforts. As CTV continues to grow, the marketing technology landscape will evolve to prioritize solutions that offer better measurement, seamless integration, and minimizing steps between CTV publishers and advertisers.

While there are hurdles to overcome, the trajectory of CTV advertising is promising. As the industry addresses the current challenges and implements solutions, CTV has the potential to become a dominant force in the advertising landscape, offering targeted, engaging, and measurable campaigns that captivate audiences across the connected TV ecosystem.

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