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With connected TV ad spend expected to hit $10.8 billion by the end of 2020 and balloon to $13 billion by 2021, the CTV space is undoubtedly having a growth spurt. But that acceleration comes with growing pains—and they are being felt by people on all sides of the industry.
“It’s going to be a bumpy road for the next many years,” Evan Adlman, AMC Networks’ svp of advanced advertising and digital partnerships, told Adweek reporter Mollie Cahillane during a panel discussion at Adweek’s third annual NexTech Summit on Tuesday. “There’s an enormous amount of fragmentation. There’s an exciting outlook on the next tech that’s going to come out in the years to come to simplify this to make it an even better platform for advertisers to reach audiences.”
At a panel discussion about the opportunities and challenges in the connected TV buying space, industry leaders discussed that bumpy road and how to smooth the pavement. As it stands, the industry faces the challenges of merging old and new ways of transacting in the TV and digital video marketplace, which are not always congruent with one another, said Leo O’Connor, svp and head of programmatic advertising and yield at ViacomCBS.
“We’re actually seeing a collision in CTV, and I think it’s a healthy collision,” O’Connor said. “We’re seeing some of those main highways of TV transaction—the upfront, scatter marketplace, direct response—kind of colliding with the transaction models that were born in a more pure-play digital—private marketplace, open exchange.”
That collision has caused a well-intentioned but ultimately negative habit of trying to treat all TV as the same, said Amanda Martin, svp of corporate development and strategic partnerships at advertising agency Goodway Group. That can remove the nuance and strengths of both platforms and lead to worse outcomes.
“Treating the two like they’re the same, and trying to make them work the same way—they don’t,” Martin said. “You lose the value of each in that circumstance.”
Navigating ad inventory fragmentation
As the connected TV space scales, buyers have to navigate the fragmentation of ad inventory across various platforms, which can undermine frequency caps and other audience management tools that buyers use to plan their media spend. There are also structural changes within agencies themselves, which must be rectified to allow for the kind of smart buying and planning required.
“You have teams who have been solely programmatic, digital, and teams who have been linear,” Martin said. “They’re also on a collision course of who owns what, and there’s a little bit of land grab happening there on the buying side.”
Sellers, meanwhile, have to convince advertisers who are still educating themselves on the space that there are different audiences to reach on different platforms, even if much of the content is the same.
“Getting the advertiser to realize that it is a new audience, it’s not the same audience, kind of goes back to ecommerce days when you have customers that still want to go into brick-and-mortar stores to buy a product and you have customers that want to shop online and have it shipped to their home,” Adlman said. “These are new viewers, and their viewing behavior is very different than a linear audience. You can’t apply the same frequency rules, the same do-not-air lists and those kinds of parameters to streaming, because there are just so many more controls that are afforded to the client.”
Programmatic is particularly fast-growing, according to first-quarter 2021 research from TVSquared, with more than 70% of surveyed marketers claiming to currently buy CTV programmatically. O’Connor predicted that streaming and connected TV will be fully programmatic, and the old ways of TV buying will become a thing of the past—it’s just a matter of time.
“Anyone who doesn’t think it’s going to be programmatic has their head in the sand,” O’Connor said. “This has the capability to bring full programmatic to the TV glass, which is huge. And it’s here, and I think we just need to iron it out so it delivers the full promise. We’re not fully where any of us want to be, but it’s getting there, and it’s getting there quickly.”
