The streaming video advertising market remains a work in progress. Audiences have already shifted to streaming in droves, and advertisers have accelerated their pursuit. However, advertisers find themselves migrating to a market still under development, with measurement holes and overlapping ad sellers.
Despite these setbacks, companies recognize they cannot afford to sit back and wait for the market to mature. Brand and agency execs gathered at the Digiday Video Advertising Summit in Palm Springs, California, last week to discuss the challenges they face and the opportunities they have found in navigating the converging TV and digital video ad market. Here’s what we learned:
TV-and-video ad measurement is a mess
Measurement remains the primary problem advertisers face across the TV and digital video ad market. The shift to streaming may eventually smooth things out, as all programming and ads become delivered over the internet, but for now the measurement picture is rudimentary at best. Traditional providers like Nielsen are able to monitor streaming impressions, but not equally across all environments. Meanwhile, the lack of a universal identifier makes it hard to measure ad exposures against individual people or households. Even marketers unconcerned with traditional reach-and-frequency metrics can struggle to ascertain performance marks, like tying product sales to ad exposures, because multi-touch attribution can be too costly or complicated for many marketers to implement effectively.
- Video ad measurement lacks parity across platforms, impacting marketers’ abilities to monitor performance and mitigate overexposure.
- While multi-touch attribution is seen as one solution, adopting it can be cost-prohibitive and labor-intensive.
Bottom line: Measuring ads across TV and streaming is imprecise, but advertisers must make do with what they can measure and use those measurements to project what they can’t.
Connected TV ad buying has become overly complicated
Connected TV advertising would appear to combine the best of TV (fully viewable ads on the biggest screen in people’s homes) and the best of digital (fine-tuned targeting and dynamic delivery). But the combination of TV and digital has also complicated the connected TV ad market. Advertisers can buy inventory from TV networks for shows syndicated on streaming services. But those streaming services can also sell inventory to the same advertisers, who can also buy ads on those services from the connected TV platforms carrying the streamers as well as ad tech firms plugging into them. There are some guardrails in place, like being able to block Hulu from running ads against specific programs. However, not all sellers are able to provide advertisers with that level of control for the inventory they aggregate; they require extra attention to detail on the part of ad buyers to mitigate inventory overlap.
- Connected TV advertising intersects direct sellers, platform aggregators and programmatic outlets that can each represent the same inventory.
- While some inventory controls are available to advertisers, many do not provide sufficient control.
Bottom line: Advertisers and agencies need to give themselves as clear a view of the inventory they are buying as they can and communicate that across their buying teams.
Creative is becoming more data-driven
Data access is no longer solely the domain of advertisers’ and agencies’ media teams. While using data has proven valuable for targeting audiences and tracking ads’ effectiveness, it is also emerging as an opportunity to ensure that the right ads are being created and run. A targeted ad is less effective when the ad itself is not crafted to appeal to that particular audience. Marketers are beginning to put media strategists, analysts, copywriters and art directors in the same room to work on campaigns and ensure the data guiding the media plan also informs the creative strategy. However, there are challenges in applying data to creative. For starters, creative teams need to be open to using data. Additionally, organizations need to make sure the data is made available to creative teams and structured in a way to be easily interpreted.
- Data has helped to make ad buying more audience-centric and is now informing ad creation so that ads can be more tailored to specific audience segments.
- To take advantage of data, creative teams need to be willing to use and able to access the data they need.
Bottom line: Targeted ad campaigns can only be as effective as the specificity of their creative content.
Deutsch’s Lauren Tetuan detailed the limitations in streaming video advertising. Her key points:
- While streaming viewership is on the rise, ad dollars have not followed in proportion because so much streaming viewership is on ad-free platforms like Netflix.
- The streaming ad market’s overlapping sellers can make it difficult to control where ads appear and how often they are shown to individuals and households.
- Non-traditional ad formats can help advertisers regain people’s attention.
- Consolidation among sellers and ad tech firms can clear up the inventory confusion.
Common Thread Collective’s Savannah Sanchez gave an overview of how Facebook’s automation tools can free up ad buyers to focus on creative. Her key points:
- Facebook’s automation tools have become so advanced that manual targeting is becoming a thing of the past.
- Facebook’s automated placement feature can ensure ads are running in the most effective spots.
- Facebook’s upcoming Campaign Budget Optimization feature will require ad buyers to be more hands-off with their campaigns.
Portal A’s Nate Houghteling outlined how traditional celebrities are becoming YouTube stars. His key points:
- A wave of mainstream stars including Steph Curry, Kylie Jenner and Jack Black have created their own YouTube channels over the past two years.
- These celebrities are trying to build their own media brands and gain autonomy outside of the traditional entertainment system.
- For marketers, working with celebrities on YouTube videos can be cheaper than hiring them to star in traditional ads.
“In terms of brand safety, TV and connected TV gets away with a lot more than digital because people aren’t taking screenshots of it.”
“Last year when we worked with Roku, they didn’t have the capability of filtering Sling to make it brand-safe. Or Pluto. You had to blacklist at a channel level. That’s a big scale issue.”
“If you are going to direct, including NBC or CBS, they can blacklist programs for you. They can do that internally because it is their inventory. When you’re looking at aggregators, that’s where it gets tricky with blacklisting.”
“We see value in some direct deals because you don’t need to pay all the tech fees and if you negotiate well they throw in a lot of added value such as brand studies, conversion lifts. There’s the discussion around how valuable is their data. We’ve found it to be very valuable.”
“Sellers have so much control in the connected TV. We recently shot a commercial with a celebrity and wanted to buy shows that celebrity was in on ABC. We wanted to give them a big, fat check just for those shows, and they said we could only do 25% of our buy within those shows specifically and everything else would be run of [prime time].”
“Sellers are obstinate because they know they’re going to sell that inventory, so they’re not really worried about it.”
“If [NBCUniversal ad sales chief] Linda Yaccarino were here, she’d say yes in all the right ways to all of us around programmatic and making content available. But she still has a sales staff with quarterly sales goals and bonuses, and they’re going to push against making things programmatic and making more content available for data-driven targeting. So when does the fight end for them?”
“When you look at the breakout of impressions for over the top, the majority of them are on smart TV. But Nielsen, these assholes — I don’t think they’re sponsoring this — they’re only able to measure Roku and Hulu [for] in-demo impressions. Then your clients are all about, ‘Where’s my Nielsen-validated in-demo impressions for OTT because of the cord-cutting with linear?’”
“The pressure is on [Nielsen], but there’s an undeniable opportunity inside of OTT. Pulling budgets out of it is just going to be shooting ourselves in the foot.”
“Frequency management is a measurement problem. You can’t get an ID. You can’t get enough measurement to understand whether this is the same person or the same household.”
“We need to start shifting to more universal ways of tracking.” — Lauren Tetuan, head of media at Deutsch
“Our job is to grow as much first-party data as possible…First-party data is currency.” — Andrew Eklund, founder and CEO of Ciceron
“The return on investment [for an organic video series that Under Armour distributed on YouTube], as measured by watch time, was so much higher because it cost the same to get in front of [viewers] as a 15- or 30-second ad but averaged seven minutes.” — Jason Mitchell, CEO of Movement Strategy
“The Disney bundle [of Disney+, Hulu and ESPN+] came out for $12.99, so they’re driving the rate of the bundles down so much. How long are the others like Netflix going to be able to keep up with a subscription at that low of a rate without allowing advertising?”
“I don’t think we’ve seen [the increase in ad-free streaming options] impact media budgets associated with video up to this point, but I still think it’s early days.”