A buyer’s guide to new CTV terminology

xandr

by Austin Scott, Head of EMEA Video Market Development at Xandr

There has been a seismic shift in the way audiences consume content. The average U.S. home owns 11 connected devices. More than 40 percent of consumers use connected TV (CTV) devices to stream content daily, and 77 percent of households are considered CTV households. Nonetheless, linear TV remains a relevant channel for media consumption. To optimize campaigns as effectively as possible, brands need to pivot their strategies to prepare for the convergence of digital and linear.

A few years ago, in a look at the terms brands need to know when it comes to connected TV, the dictionary seemed to be set — but now the fast-paced growth of CTV has given rise to more terminology and nuances that buyers need to understand to make strategic and lucrative spending decisions.

Before diving into new terms, however, let’s clear up a common misconception: “CTV” and “smart TV” are not synonymous. Whereas all smart TVs come equipped with built-in internet jacks, any type of TV that’s capable of streaming digital video qualifies as CTV. All smart TVs are connected — but so are TVs that can stream content from devices such as Roku, Amazon Fire Stick, Apple TV or even a video game console.

Now, the terms buyers need to know when talking about CTV today.

Consumption models

Video on demand (VOD) is an interactive TV technology that allows consumers to view content as it is streamed in real time, or download programs and view them later. Consumers can access programs and content across several networks. When it comes to CTV, there are four key VOD formats to understand:

  • SVOD: Subscription video on demand services provide viewers with streaming video content, usually for unlimited consumption, in exchange for a subscription fee. Most SVOD services are 100 percent ad-free. Examples include Netflix, HBO Max, Disney+ and Apple TV+.
  • AVOD: Advertising video on demand services provide viewers with streaming video content for free, or for a reduced price. Hulu, which arguably straddles the line between SVOD and AVOD, is one service that offers a reduced-price, ad-supported subscription tier. In AVOD models, ad revenue is used to support content production and other costs.
  • BVOD: Broadcast video on demand offers high quality, long-form content that is controlled, enabled and consumed at the viewer’s discretion after or before it has aired on broadcast television. Content is funded through the use of both pre-roll and mid-roll ads at pre-determined ad breaks that mimic the broadcast TV experience.
  • TVOD: Transactional video on demand allows consumers to purchase content on a pay-per-view basis. Examples include Apple’s iTunes and Amazon’s video store.

Features

To make the most of their spend, brands need to ensure their ads are not competing for consumers’ attention. At the same time, publishers need to ensure they’re not boring viewers with the same ads repeatedly. That’s why features like frequency capping and competitive separation are important.

  • Frequency capping: As audiences grow for connected TV, the current blight of repetitive ads becomes a bigger problem. Technology can help digital video platforms keep tabs on frequency, and frequency capping can prevent ads from running after a predetermined umpteenth time. 
  • Competitive separation: Competitive separation ensures that the categories and brands represented within a publisher’s ad pod do not conflict or compete with one another. For the end consumer, it reduces ad fatigue and allows brands’ messages to reach consumers in a more powerful way.

Identity and targeting

Marketers and publishers need technology platforms that provide accurate identity and targeting solutions, and therefore enable smart targeting and measurement across devices.

  • IFA: The Identifier for Advertising provides device identification while giving end users the ability to limit the device and consumer information accessed by advertisers or apps. According to IAB Tech Lab, in addition to an IFA itself, ad and measurement platforms need to identify the source of the IFA or the IFA Type. This could be device-generated (and therefore used across apps), publisher- or SSP-provided or a temporary/session IFA. Without this context, the usefulness of the IFA is limited.
  • Deterministic vs. probabilistic IDs: Deterministic IDs are based on subscriber data linked across authenticated services. The advantage of a deterministic match is that the customer identity is verified. Probabilistic graphs often have more scale but are largely modeled on previous behavior and statistical analysis, which can reduce precision and accuracy.
  • Behavioral targeting: Buyers reach consumers based on their previous actions or interests, available through search history or other means, to match relevant users with their message.
  • Video content metadata: Information describing the video content before, around or after an ad request, including content duration, delivery type (VOD or streaming), genre and program type (i.e., movie, series or event).
  • Unique app identifier – Unique app identifiers provide advertisers with a standardized way to identify and understand what apps they are buying on. Historically, this hasn’t been available to video or CTV buyers. These classifications are important from an ad targeting perspective, and they also support the contextual classification of inventory.
  • Household vs. device-based targeting: Similar to addressable TV, household targeting means advertisements reach consumers based on their household. Two families can be watching the same show via CTV, but see different ads based on various identifiers. Device-based targeting means an advertiser can reach audiences based on the device they are using, whether it’s a CTV, mobile phone or desktop.

Cross-screen campaign considerations

Cross-screen campaigns allow brands to reach the same audience across TV and digital in a single buy, and receive meaningful analytics and insight to understand performance. Such campaigns are essential for buyers to reach key audiences at scale in a measurable way.

  • Omnichannel audience reach: Advertisers can track audience engagement across digital devices. They can measure unique devices reached from their CTV cross-device campaigns, and attribute online conversions, such as website visits or online purchases, to those campaigns.
  • Cross-device attribution: This practice attributes conversions — which can take place online, offline, via mobile apps or foot traffic — to a specific campaign, across all digital devices. Cross-device attribution combines browsing, location and viewership data to reach audiences as they stream across devices, including CTV, mobile and desktop.
  • Converged TV and digital: As pay-TV audiences shrink and media consumption fragments, buyers and sellers will converge TV and digital video advertising as they seek  the ability to plan, buy and measure ads across formats and screens on aggregated inventory sources.

Just as terminology and definitions of CTV — and all its elements — have changed to date, new terms and the ideas they capture will continue to emerge. As CTV grows to encompass more and more of viewers’ tune-in and attention, marketers and advertisers are expanding the ways they reach them. And one thing is certain in all of that — they’re going to need a bigger dictionary as they go.

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