CTV (Connected TV) advertising is growing massively and Covid has only further accelerated this growth in the last couple of years. With audiences shifting to CTV from traditional linear TV, the advertisers are following. In 2020 alone, CTV ads have accounted for 40% of all video impressions.
Know everything important about the CTV space by tuning into this episode of AdTech | Alike Audience where Bosco Lam, Derek Fan, and Jessica Lam discuss the emergence of the CTV space, strategies for campaign effectiveness, upcoming cookieless alternatives, and combating ad fraud.
CTV (Connected TV) advertising is growing massively and Covid has only further accelerated this growth in the last couple of years. With audiences shifting to CTV from traditional linear TV, the advertisers are following. In 2020 alone, CTV ads have accounted for 40% of all video impressions.
Know everything important about the CTV space by tuning into this episode of AdTech | Alike Audience where Bosco Lam, Derek Fan, and Jessica Lam discuss the emergence of the CTV space, strategies for campaign effectiveness, upcoming cookieless alternatives, and combating ad fraud.
Bosco Lam
Basically, when we look at the consumption pattern about consumers, it has shifted from a scheduled airtime to on-demand and maybe on the go, meaning that you can select your own favorite movies whenever you like, wherever you like. And because of such a behavior change, TV advertising has shifted from the mass market, down to a household or even an individual.
Derek Fan 00:30
And if you're kind of a statistics and historical data nerd like myself, you would probably appreciate some facts such as 63% of all time spent on television right now is actually spent on online streaming and approximately 80 minutes per day is spent on AVOD, which is ad-supported streaming content.
Jessica Lam 01:07
So welcome to the first episode of AlikeAudience’s AdTech podcast where we discuss the latest ad tech trends and industry insights in a series of interviews with industry leaders. I'm Jessica and I'm the director of the brand creatives, a boutique agency on brand content for tech companies and I'm hosting the podcast today. So first, I'd like to introduce Bosco Lam. He is the co-founder of AlikeAudience and addressability working group member of iAB Tech Lab. And Derek Fan who's the Director of Business Development and Partnerships at AlikeAudience. So today, we will like to share their perspective on CTV strategies and combating ad fraud and CTV an issue that advertisers are concerned about. So to begin with, let's start with a key question. Why is CTV, which stands for connected TV an important part of digital advertising strategy today? Perhaps we could start with Bosco?
Bosco Lam 02:09
Sure. Thank you, Jessica. My pleasure to be here today. Well, we're looking at CTV, let's define how CTV has shifted from the linear TV, the most traditional type of broadcasting to today's connected TV ecosystem, right. So basically, a lot of premium content is being streamed to the apps, either on your Smart TV or through an what we call the OTT over the top device. Basically, when we look at the consumption pattern about consumers, it has shifted from a scheduled airtime to on demand, and maybe on the go, meaning that you can select your own favorite movies whenever you like, wherever you like. And because such a behavior change, TV advertising has shifted from the mass market, down to a household or even an individual, right. So you can pick your right audiences throughout your marketing funnels. Like from the top of the funnel, you have your awareness campaign, which you can target, and household, which we'll go through that later. And also, we will have opportunity to target the need or even the lower funnel for product comparison. So outcome to that CTV opens up a huge opportunity for the massive linear TV budget to shift into the whole new ecosystem.
Derek Fan 03:49
I agree 100% with what Bosco mentioned. I think there's an immense growth in this space, especially in the coming years. In just 2020 alone, I read an article that talks about CTV ads actually accounted for 40% of all video impressions. And that CTV ad revenue in by the end of this year is expected to reach 11 billion. And that is supposed to reach as high as high as 19 billion by the end of 2024. And if you're kind of a statistics and historical data nerd like myself, you would probably appreciate some facts, such as 63% of all time spent on television right now is actually spent on online streaming and approximately 80 minutes per day is spent on AVOD, which is ad supported streaming content. So I think part of this trend is really driven by COVID. I think that COVID itself accelerated a lot of the shift from linear TV to connected TV, you can think of think about, I think many of us have lived in the US and have experienced Super Bowl. Super Bowl in 2021 was lowest in decades in terms of viewership, so I think that speaks volumes to the amount of people that are actually cutting cords and shifting from linear television to connected TV. And obviously, when consumers have that shift, advertisers will follow. And then from our side at AlikeAudience, we're seeing a lot of our major DSP partners also building out infrastructure to support this channel from an inventory from a targeting and measurement standpoint. And so I think, in many ways, it's very similar to how digital marketing first emerged. Think about the first online banner that replaced traditional out-of-home billboards, I think what we're seeing right now is very similar, in that a lot of marketers are starting to see that connected TV is indeed more cost effective. First of all, it's also more efficient to buy, it's more efficient to measure. There's more flexibility when it comes to adjusting your creative and your messaging during the campaign. And then obviously, you have more control over audience reach and frequency too.
Jessica Lam 06:02
Hmm, that's really interesting. So it looks like COVID has changed a lot of viewing patterns and bringing flocks of viewers to the CTV industry. And this presents a goldmine of opportunities for CTV advertisers. So as a key strategist for AlikeAudience brand positioning, I understand that AlikeAudience is passionate about ethical future-proof data solutions for advertisers. So can you talk a little bit more about how AlikeAudience CTV strategy aligns with the vision and your mission?
Derek Fan 06:34
Sure, I think before I answer that, I think it's important to note that, unlike the typical desktop and mobile campaigns that we're very used to running, CTV doesn't rely on cookies. Instead, it has long relied on IP addresses as the most common way to build household graphs and to identify audiences and target them. And I think that being said, though, there's been lots of speculation lately that IP addresses would eventually face the same outcome as third-party cookies. And that's partly due to the nature of IP addresses there, they're not always precise. And there, there is a way for it to be reverse engineered to to see which consumer which household there that might be. So there is definitely some PII and privacy issues facing CTV IP addresses, and definitely has some challenges for GDPR and CCPA. And I think the general consensus is that it's going to go away in a couple of years. So I think during this time, marketers should definitely look for alternatives. Of course, CTV targeting can use the unique device IDs that are provided by the CTV platform or the streaming service that they're buying from. But bear in mind, when you use only those, you might have a scale problem. So this is where a lot of the emerging alternative IDs in the space right now, especially as cookieless is coming would help fill this gap. For example, unified ID 2.0, LiveRamp’s RampID, Yahoo's ConnectID, all of which rely on hashed emails, which then allows the marketer to link different consumer devices together using a single and very persistent currency for a truly omnichannel strategy. Of course, the prerequisite here is that there needs to be widespread adoption among buyers, among sellers, CTV platforms, ad tech vendors like ourselves, and I think AlikeAudience right now we're in a very good position because we have adopted all three of those IDs, UID, RampID and Yahoo's ConnectID. So we were ready to actually work with marketers that want to target on the CTV space.
Jessica Lam 08:48
So sounds like partnerships are one of the key factors in advancing mission, your mission and your vision. What about you, Bosco?
Bosco Lam 09:00
Well, I think Derek has mentioned a great point about partnership. It is all built on trust and transparency. So actually, when you look at the fundamental questions that advertisers all the agencies asked today is about what's happening under the hood. How can I attribute? How can I measure, right? Otherwise, they would not be able to tell how the advertising budget is banned in an effective way. So I think this is a key question not only for CTV, right, like 10 years or 20 years ago, when we begin with desktop and mobile. We always ask the question transparency and attribution. You just cannot have players and referees to be the same person, right? You just cannot have that black box that sits under the hood and creates his own homework. So you have to be clear about the role of different solution partners. and how they contribute to your campaign effectiveness. I think the ecosystem is quite mature from the desktop and mobile. But when it comes to the connected TVs, we often ask, Who are my third party independent attribution partner who can give me a very objective feedback. So this is the common questions that we see in this ecosystem. And say, for example, there are certain CDP inventories that ties with a smart TV manufacturer is a independent referee or independent measurement partner that would be able to deploy the pixel and to track you know, how many view through, what are the characteristics of this household. So for AlikeAudience now, our vision is always here to embrace the collaboration with media partners, DSPs, so that we can demonstrate the value of our audience data. And we can collect this data in an ethical and come and it comes with a user consents. And then it is measured by independent attribution partner, we are not grading our homework, but we are working in a collaborative way I would say.
Jessica Lam 11:24
I see. So there is a lot of AlikeAudience is doing and it seems like the future of advertising, it's definitely in partnerships, identity solutions, and being privacy compliant, so that but still allows advertisers to target with accuracy with such as the household graph that you mentioned. So what about ad fraud? Is that something that advertisers can prepare for when they think about their CTV strategies?
Bosco Lam 11:59
Well, first, I think it is easy to put an equal sign between ad fraud and ad effectiveness. My point of view is actually ad fraud is one of the subsets of ad effectiveness, right? You can have a legit ad impression targeting a real person, but irrelevant audience. I want to make it clear first, because we used to ask the fundamental question, right? What is the incentive for ad fraud? Why are the bad players are targeting these advertisers with fraud, right? Are they wanting to meet your KPI in an artificial way. Right? Are they trying to inject ad impressions so that they can fulfill certain numbers of reach? So advertisers and agencies has to be clear in the KPI. Are they targeting to reach a good view through rate? Or are they looking for conversion, say for example. So once you have a concrete KPI, then you will have to look at how you measure this KPI. I will start to uncover what's happening under the hood. Right? If you find a winning formula, well, congratulations, then you can keep scaling this strategy. But if you find something suspicious, under the black box, then you should keep deep dive into it. Because you're under path to find are there any unknown third-party players coming to the game? Or is it transparent enough for you to identify who is contributing to what? Say for example, the inventory is coming from which IP address, which household? Or at what time? It just doesn't make sense if I have a spiking impression for this household, and there should be something wrong.
Jessica Lam 14:03
I see. So you mean advertisers should be savvy as well when they look at your KPIs instead of just blindly believing what they are served. So is that right?
Bosco Lam 14:17
Yeah, because there are many subsets of ad effectiveness. Say for example, the creative, your audience data, even the timing of the campaign. So for example, one CPG brands, they actually producing chocolates, and they target the kids, right? They love chocolates, but the decision-maker is mom, right? They're the ones who buy the chocolates. It's not the kids who buy it. So I think CTV is in a good shape because a lot of shared time or shared eyeballs when your family sits in front of your television. Your ad creatives has to be aligned with this theme of family. Like the other day I watched an ad, it is about a print, where you can upload a couple of photos. So you can create a digital print books and send it to your family and friends. So it is very fascinating because it creates a message about family sits within the living room. And I may be the decision-maker, but actually, my girlfriend would love to actually create this digital book print book. So it is a good angle to think about what's the creative to drive the effectiveness of your campaign, and maybe to target audience, you have to pick the right audience set within this household. So ad fraud is only many of the subsets of this ad effectiveness. When you ask the right question to see, is the data working? Is the creative working? Or is there any other suspicious activities, then that will drive you to make a conclusion on your overall campaign effectiveness but not on the effort alone.
Jessica Lam 16:13
That's a great perspective. So I also understand that AlikeAudience products, like the segments you do, brings across different mediums to pinpoint with greater accuracy in targeting, especially with CTVs. Is that, Did I understand that correctly? So there will be data from mobile devices from TV so that even though it's different members in a household, it would be more accurate in targeting because there are different devices involved, is that right?
Bosco Lam 16:52
Right. So imagine, back to the example of KitKats and moms. So connected TV as is more like a household level, because like you sit in front of the big screen of a big TV screen. It is quite different from the individual mobile, like you won't share your mobile screen with your friends or family all the time, right. So it is good to connect different pieces of data up at the household level. It will give you a more holistic view of your eyeballs basically.
Jessica Lam 17:29
Understood. Understood. So what about you, Derek? What is your input on this subject in the CTV industry?
Derek Fan 17:37
I think when it comes to ad fraud in the CTV space, it's partly due to the fact that CTV, it's super fragmented right now. And I think, you know, because see, CTV CPMs are tend to be higher than other formats like display and banner ads, the incentive for the fraud is because of that. And one of the more common types of ad fraud I've seen is spoofing, where essentially bad actors or nefarious actors, they simulate someone watching a CTV ad. And obviously, that results in the marketer buying the CTV ad space thinking it would be served to a particular group of people, but then it ends up at a different device targeting a different set of people. And I think as a marketer in order to close that gap and avoid those types of spoofing problems is to have stronger integrations with your CTV provider, whoever you're buying your media from, and also work with third-party ad verification companies, and especially work with inventory that allows pixels for tracking that way you as a marketer, you have a level of validation and you have some, you're doing your own tracking, you're not just kind of like what Basco said, you're not just relying on one referee that might be grading its own homework. So try to reduce the number of layers between yourself and the CTV inventory. And also to echo what Bosco said in terms of KPIs, make sure your team is aligned on a set of metrics that you want to track and make sure that's consistent across the different players with different platforms and different services that you're working with for CTV and make sure that's aligned.
Jessica Lam 19:21
Great, thank you. That's very interesting. Two different perspectives. And hopefully, with better maturity of the industry, and better technology, eventually this issue will become less for advertisers. So last question here, with CDP being such a fast area of growth in the ad tech industry, what are some industry trends that advertisers should look out for in the coming years? Ah,
Derek Fan 19:51
I think there's a lot that might happen. One of the more interesting ones I'm excited to see is the different creative ways that marketers can engage with their consumers in the CTV space. Earlier I mentioned about fragmentation, which obviously has its downsides such as tracking and targeting. But it also, the upside is that it increases competition and variety available in the marketplace. I think as more players start to emerge in the CTV space, there would definitely be more opportunities for marketers to adapt their creatives and the creatives functionality based on the different platforms that they're serving on and each platform’s unique environments. So think, for example, we're starting to see a lot of TV commerce companies, they are putting QR codes back on the screen for CCTV formats, just as we thought QR codes was was no longer useful. It seems to rise, rise from its semi-dead ashes. And it seems to have a good use case right now to involve the viewer to have more engagement and more interaction with the actual CTV ad. And possibly something else I just saw today, and we discussed internally is potentially automation in the future, right? Because right now, CTV ads are really mostly used by large companies that have the budget to create a TV commercial, which obviously has huge production costs associated with it. So the entry to barrier for a lot of these small to medium enterprises or mid-market advertisers is quite high. So how do we, as an industry, create more tools for these small to medium companies so that they can actually repurpose some of their existing creatives from their search or social channel or display channels into the CTV ad space? I think is something that we would see in the future. I think that's kind of the trend that search and social had how Facebook and Google opened that gate to more small to medium enterprises, and I think CTV space, would see that in the next couple of years.
Jessica Lam 21:57
It's great. And what about your Basco? What do you think?
Bosco Lam 22:02
Metaverse, VR, just kidding. So I think that immersive experience will be a trend as well for the household. Imagine you have a 3D glasses or VR glasses that you can have a different experience into the rich media, because at the end of the day, CTV is offering you rich media premium contents. And the way I see this is another type of format that builds on the ad business. And the ad business is actually all about trust and transparency nowadays. Why the consumer giving up the time, the attention, the data, and what value that they would exchange is that the experience with the brand, the interaction with the contents. So I believe this will be the cornerstone for us to build a business and to I’d say scale up the CTV business right now. It is still in a very early days with different manufacturers, content providers, I’d see a lot more content coming up in different interactive way. Like Derek has mentioned the way to interact with a QR code, or some immersive experience with a VR and so on.
Jessica Lam 23:28
That's great. So thank you so much for sharing both your insights, Derek and Bosco. So I learned a lot today about CTV advertising and about the strategies that advertisers can use and where the industry is heading. So thank you for listening for those who are tuning in. And for more podcast episodes from AlikeAudience, remember to hit the subscribe button. And don't forget to leave us a review and tag us on social. We will be coming up with more different topics. So stay tuned and transcripts will be on our podcast page. For more information about AlikeAudience segment offerings, you can visit us at www.alike audience.com. That's www.alikeaudience.com Thank you and hope to see you next time. Thanks.