Future of TV Briefing: Why the CTV ad industry still needs to wean itself off the IP address

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This week’s Future of TV Briefing looks — once again — at why the CTV ad industry needs to reduce its reliance on the IP address as a tracking mechanism.

  • IP = PII
  • Paramount’s suitor, cable TV’s complacent programming, Netflix’s next live sports stream and more

IP = PII

Not to put a lump of coal in the CTV ad industry’s stocking ahead of the holidays… But companies — advertisers, publishers, ad tech intermediaries, etc. — really should reconsider their use of the IP address for tracking audiences.

Not only are companies including Apple and Google limiting collection of people’s IP addresses, but the categorization of the IP address as personal information by some privacy laws, the household-level cross-device tracking it enables and the potential for children to be included in that tracking make the IP address as flammable as a dried-out Christmas tree.

“It hasn’t been tested from a legal perspective, like it hasn’t been litigated really. But I would err on the side of caution,” said Jerel Pacis Agatep, a practice innovation attorney at law firm Gunderson Dettmer.

The reason for that caution is the potential for the IP address to be considered by regulators as a means of tracking children, and in violation of children’s privacy law. The logic would go like this: The IP address is used to track a household and can be combined with other information in order to identify members of that household on various devices, including phones and computers. If a child is a member of that household, then the IP address would provide a means of tracking that child, whether or not a company is intentionally or knowingly tracking a child.

Again, this potential privacy violation has yet to be tested. But that doesn’t mean companies aren’t already taking steps to avoid being found at fault. For example, media company Future Today, which owns and operates the kid-focused streaming service HappyKids, takes precautions to not pass IP addresses when programmatically selling ads on its service, said Vikrant Mathur, co-founder of Future Today.

“We make sure that any requests that are sent downstream mask out that information, so that even by mistake a third party may not mishandle that information,” said Mathur.

I’ll have more on the intersection between CTV, the IP address and kids’ privacy concerns in a video essay to be published in January. But it’s not only kids’ privacy that’s a concern for companies using the IP address as an identifier.

Case in point: A health care client of Butler, Shine, Stern & Partners had been using the IP address as a means for measuring and attributing the performance of its campaigns. But the rise in lawsuits accusing companies like Facebook of privacy violations for sharing people’s personal information — and the IP is considered personal information in states like California — led that brand to relieve itself of tracking mechanisms, including the third-party cookie as well as the IP address.

“We went all the way up to [the brand’s] top legal folks, showed them what was being passed back and forth — which was the IP address — so they got very nervous about that. And they basically pulled everything,” Trina Arnett, head of marketing sciences at BSSP, said on stage during DPMS.

A dramatic move, sure. But also a premonitory one. As we’ve covered before, the IP address is an unreliable identifier in the long term because of its use as a tracking mechanism. Apple already allows its users to hide their IP address, and Google announced in October a test to similarly obscure IP addresses in Chrome. Neither effort is specifically aimed at CTV devices, but they do disrupt the use of the IP address to connect a CTV device to a phone or computer in a given household.

But it’s not only Apple and Google taking steps to discourage companies from using the IP address for tracking. Netflix does not pass the IP address to advertisers, as Digiday previously reported. 

So even if potential privacy violations are not an immediate consideration for companies to wean themselves off the IP address once and for all, the disruption to their identity graphs and ability to identify audiences across devices should be. “If [the IP address] goes away, cross-device targeting will become extremely difficult,” Erin Mullaney, associate media director at Connelly Partners, said on stage during DPMS.

Nonetheless, the IP address is still pretty widely available in the CTV ad market. Despite the aforementioned causes for concern, “we’re not really seeing a huge impact [on IP addresses being passed in the programmatic bidstream],” Mullaney said. “We’re seeing that a lot of the bids in the bidstream for some of the [demand-side platforms] that we’re using don’t include cookies and IP addresses are still there.”

What we’ve heard

“I don’t know if it’s necessarily a huge gap — or maybe it’s because it’s kind flying under the radar now with streaming is continuous play [where streaming services continue to air shows and ads after a TV is turned off]. We’re having a hard time identifying how often is that actually happening. I think some partners are getting better, where they’ll serve [a prompt asking] ‘Are you still watching?’ and that helps protect it.”

CMI Group’s Andrew Miller on stage during the Digiday Programmatic Marketing Summit last week

Numbers to know

17%: Percentage share of Los Angeles-based entertainment workers who lost their jobs during the writers’ and actors’ strikes.

9,000: Number of women suing Disney for underpaying them compared to their male colleagues.

5%: Percentage share of Candle Media-owned Moonbug Entertainment’s employees that the studio behind “CoComelon” laid off in October.

$13.99: New monthly subscription price that legacy YouTube Premium subscribers will be required to pay starting in January.

20%: Percentage share of U.S. households that have an over-the-air TV antennae.

What we’ve covered

As tech giants add more AI tools, Runway and Getty Images team up:

  • Runway will use Getty Images’ stock library to train its generative AI video technology.
  • The updated model is in testing and slated to be released widely next year.

Read more about generative AI video here.

23andMe bucks the linear TV decline with its return to the ad channel:

  • The biotech brand took a break from advertising on traditional TV in 2022.
  • 23andMe returned to TV because of its broad reach and storytelling capabilities.

Read more about 23andMe here.

How Whalar’s Gaz Alushi is putting the creator economy into programmatic terms:

  • Influencer marketing and creator campaigns can be amplified and measured similarly to programmatic ad buys.
  • Link- and pixel-based tracking are two methods for measuring creator campaigns’ performance.

Read more about the creator economy here.

VideoAmp touts its commingled ID solution as a step forward in a cookie-less world:

  • The measurement firm has created a program to combine ID sets through its data clean room.
  • Those identifiers being combined include email addresses, IP addresses and device IDs.

Read more about VideoAmp here.

What we’re reading

Paramount finds a suitor:

The parent company of CBS and MTV has received acquisition interest from Skydance Media, though that doesn’t mean a deal is definitely in the offing, according to Puck.

Cable TV’s complacent programming:

The semblance between cable TV networks and free, ad-supported streaming TV (FAST) channels appears to cut both ways, with the former increasingly airing a predominant mix of old shows instead of new originals, according to The New York Times.

Netflix’s latest live sports plans:

The streamer that had previously — and vociferously — announced its lack of interest in live sports is now planning to air a live tennis match featuring Rafael Nadal in March, according to The Wall Street Journal.

Hollywood’s next potential work stoppage:

The labor union representing Hollywood crew members — the International Alliance of Theatrical Stage Employees — is next up to negotiate its contact with film and TV studios in 2024, and it’s unclear how hard of a line the union will hold in making new demands in light of the writers’ and actors’ strikes and new deals, according to Variety.

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