The State of CTV Advertising
Ad buying is changing. For example, now you can buy from an agency that has deep knowledge of data around local viewing, or you can go to a TV manufacturer that has deep knowledge of all of the viewing on its hardware.
In today’s fragmented ad market, advertisers are trying to find their customers on various platforms, from cable TV to local programming and the many streaming services and FAST offerings competing for audience share. Statista has pegged TV advertising in 2023 at $66.31 billion. IAB had 2022’s U.S. ad spend on CTV at $21.2 billion, which means people have figured out how to buy advertising on CTV, but not proportionally to the rate that viewing has moved from linear.
“Most of our clients are larger agencies who are doing a wide swath of TV targeting and are trying their best on the buying side to combine multiple channels,” notes Rich Kaufman, VP of business development at Centriply. To serve these clients, he says, “We aggregated and curated all the available inventory from every MVPD in every market, every cable zone, and [return] geotargeting.” Then, the company added on a lot of other targeted data for a better 360 view.
One question Centriply answers is how to buy advanced TV, a targeted audience that can be reached within multiple platforms and grouped by known data. A media campaign may include both digital and linear targets based on location, interest, propensity to buy, and all of the data a viewer has ever shared within third-party environs, plus first-party data they’ve also left as breadcrumbs to their buying habits.
Centriply has a data platform called TangoGEO that powers both planning and buying. Now it works with TV station groups like Sinclair, Hearst, Gray, Tegna, and Nexstar when they need to respond to multi-market proposals, such as new product launches to older millennials with families in neighborhoods of a certain net worth within suburbs of a specific size throughout the U.S., plus other datapoints. The result is targeted local media planning and purchasing across multiple platforms. These targeted ad-buying decisions are complicated by the question of who is watching in the household.
An alternative to this is advertising on a specific TV, such as Vizio smart TVs. This is television’s equivalent to a walled garden, where brands can target all sorts of things, but the viewer must be on a Vizio TV.
Vizio started its ad business in 2019. In Q2 2023, 57% of the time a consumer had their Vizio TV on, they were watching streamed content. Adam Bergman, group VP for advertising and data sales at Vizio, says the company can target at the national level, all the way down into ZIP
plus four. This is similar to what Centriply does, but of course, only on Vizio hardware.
Vizio’s WatchFree+ has more than 300 FAST channels with 8–12 minutes of advertising per hour. “For the last 7–8 years,” Bergman says, “we’ve been collecting consumer opt-in viewership data from our televisions, where we gather second-by-second data on what the device is watching--what channels, what streaming apps, what content, and what ads viewers are exposed to.”
If location is everything, then Vizio is making the best of having a home screen where viewers linger. On average, viewers spend 5–7 minutes searching for something to watch, Bergman says. This has given Vizio the opportunity to create a number of types of inventory to sell: program sponsorships, traditional ad spots, or sponsored content, like a campaign the company did recently for The Home Depot in which viewers could shop via QR code during a program. About 70% of the Vizio inventory is transacted directly and the remainder, programmatically.
The question to ponder is who gets the better audience reach: advertisers who go deep on data from specific areas or those who go deep on specific walled gardens? And when will CTV advertising buys become proportional to viewing time? The first answer has a lot more data behind it and may be an easier choice. The second will ultimately change the streaming side of the business. I’m looking forward to seeing ad budgets catch up to viewing time even if advertisers still don’t know who is viewing in each household.
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