As consumers continue to shift from linear to streaming, understanding what ad experiences they find worthwhile has become more crucial and transparency will be the major issue the industry will need to solve says a research post from leading industry analyst Alan Wolk.
The study by the TVREV co-founder noted that the emergence of the streaming era and a flourishing connected TV (CTV) industry has led to a transformative shift in media and entertainment and gaining insight on understanding has been made more important as ad-supported video-on-demand (AVOD) viewership in the US surges, with brands needing to establish how to reach these audiences more effectively.
Having spoken with execs at ad agencies, media buying agencies, ad tech companies, brands, CTV apps, studios and streaming device manufacturers Wolk revealed that consumers were now watching as much ad-supported CTV as ad-free and they are spending more time on streaming than on linear. Overall, he predicted linear would be the big loser as ratings drop and key segments are more easily reached on CTV.
Yet Wolk warned that the shift of ad budgets to CTV was not happening faster as CTV inventory is not easy to buy. He also established that the biggest roadblock facing CTV in the battle to gain more ad dollars is the lack of transparency as to where ads are running when placed programmatically via open auction programmatic, that is open exchanges and open auctions.
Even though he noted that solutions exist, ranging from extended content IDs to watermarking, they need to be implemented on an industry-wide basis to help with measurement and verification issues. However, the study cautioned that it was untenable to not let brands know where their ads ran and they will not increase spending in a way that even remotely keeps pace with viewership until it is solved.
On a brighter note, Wolk predicted that ad-supported kids and family programming will be one of the brightest spots on CTV. He noted that because US children’s television is subject to COPPA (Children’s Online Privacy Protection Act) regulations, everything must be bought directly from the programmer. As such, this means brands know exactly where their ads ran – what shows, what times, even what position in the ad pods. He added that not only does a COPPA-compliant direct sales methodology help solve for transparency issues, but they provide brands with a brand-safe and suitable environment for their messaging.
However, Wolk advised brands to move quickly, forecasting that as more families cut the cable cord and sign up for ad-free streaming services, reaching these families will become increasingly difficult. This will increase the value of these programs and platforms on ad-supported CTV.
Having spoken with execs at ad agencies, media buying agencies, ad tech companies, brands, CTV apps, studios and streaming device manufacturers Wolk revealed that consumers were now watching as much ad-supported CTV as ad-free and they are spending more time on streaming than on linear. Overall, he predicted linear would be the big loser as ratings drop and key segments are more easily reached on CTV.
Yet Wolk warned that the shift of ad budgets to CTV was not happening faster as CTV inventory is not easy to buy. He also established that the biggest roadblock facing CTV in the battle to gain more ad dollars is the lack of transparency as to where ads are running when placed programmatically via open auction programmatic, that is open exchanges and open auctions.
Even though he noted that solutions exist, ranging from extended content IDs to watermarking, they need to be implemented on an industry-wide basis to help with measurement and verification issues. However, the study cautioned that it was untenable to not let brands know where their ads ran and they will not increase spending in a way that even remotely keeps pace with viewership until it is solved.
On a brighter note, Wolk predicted that ad-supported kids and family programming will be one of the brightest spots on CTV. He noted that because US children’s television is subject to COPPA (Children’s Online Privacy Protection Act) regulations, everything must be bought directly from the programmer. As such, this means brands know exactly where their ads ran – what shows, what times, even what position in the ad pods. He added that not only does a COPPA-compliant direct sales methodology help solve for transparency issues, but they provide brands with a brand-safe and suitable environment for their messaging.
However, Wolk advised brands to move quickly, forecasting that as more families cut the cable cord and sign up for ad-free streaming services, reaching these families will become increasingly difficult. This will increase the value of these programs and platforms on ad-supported CTV.
