The fast pace of growth in connected TV (CTV) advertising is roiling the world of advertising as it begins to deliver on the long-held promise that brought so many into the digital ad business: the idea that someday we could marry the brand-building power of lean-back sight, sound and motion on big screens (TV) with targeted, personalised ads and closed loop reporting on generated leads and sales (direct response).
Yep, for many decades, hundreds of billions of shareholder value have been chasing the elusive formula of the future of advertising: TV + DR + Digitisation = $$
Where are today’s bets on the likely winners in that future? For sure, the big streamers like Netflix, Amazon and Google/YouTube are favoured by Wall Street.
The TV companies, not so much. The Trade Desk has been killing it, and its stock price reflects it. Other DSPs and SSPs are doing well, but don’t have the same favor with public investors.
What are some of the predictable certainties of the future of CTV advertising?
I believe that you can safely bet on these four playing out:
Both long-form and short-form video win.
It’s not really TikTok versus Netflix. Clearly, people are watching both long-form and short-form video, and will continue to do so for many, many years. Both formats win.
Automation and true self-serve will grow fast.
Today, lots of ad-buying companies show off sexy user interfaces, but really operate as mechanical Turks behind the scenes. That will change. Software-born automation, enhanced by AI, will finally bring us true automation and self-service in CTV ads.
Small and medium-sized businesses and agencies will dominate CTV spend over time.
Just as we’ve seen with social media platforms like Meta, as automated tools democratise access to CTV ad inventory and powerful targeting, smaller marketers and agencies, many of them with tight local, regional, vertical or niche foci, will grow and grow as CTV advertisers.
Many will use it to amplify or boost their spend on search and social. By the end of this decade, they will collectively spend much more on CTV as a group than the 1 000 biggest brands, by a long shot.
Performance will be table stakes.
While I don’t think all CTV ad campaigns will be chasing “cost per acquisition” as the only metric that matters, I do believe that full-funnel performance measurements will be table stakes in all CTV campaigns.
This means that how each and every campaign performs against advertiser objectives will be critical. Yes, even for content-driven campaigns, performance will matter and will be valued in the eyes of the beholder (the advertiser and its agency).
What do you think?
This story was first published by MediaPost.com and is republished with the permission of the author.
Dave Morgan, a lawyer by training, is the CEO and founder of Simulmedia. He previously founded and ran both TACODA, Inc, an online advertising company that pioneered behavioural online marketing and was acquired by AOL in 2007 for $275 million, and Real Media, Inc, one of the world’s first ad serving and online ad network companies and a predecessor to 24/7 Real Media (TFSM), which was later sold to WPP for $649 million. Follow him on Twitter @davemorgannyc
