January 26, 2018
The 5 Biggest Misconceptions About Connected TV Advertising
By Morgan Fosina

A new survey shows at 60% penetration, more households have connected TVs than tablets. The number of connected TV households jumped 10.1% in 2017 versus the year before, according to eMarketer. TV is rapidly evolving from appointment viewing to on-demand and tens of millions are cutting the cord. The rise of connected TV (CTV) is also evident in popular culture, as Netflix and HBO’s programs create more buzz than network shows.

The only knock against connected TV is that advertising isn’t taking off as quickly as some might hope. One major reason is that media buyers have some misconceptions about connected TV. Here are five that we hear most often along with reality checks:

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  1. It’s based on the same demographic targeting that linear TV is. Actually, with CTV, advertisers can go beyond linear TV-type targeting and adapt digital media techniques. While demographics are one tool in the arsenal, advertisers can also target by location, geography and interest. Some CTV programs let advertisers target by as many as 60,000 audience segments, including people who have kids and people who may be in the market for a car.
  2. Targeted media is so expensive, you’re better off with a standard broadcast buy. While it’s true that CPMs rise as you add more targeting variables, it’s possible to find a middle ground in which you can add some targeting without making it more expensive to reach 100,000 than it would be to reach 1 million. From a marketing standpoint, such targeting eliminates waste and makes your spending more effective, so reaching more people with one ad is a moot point anyway.
  3. Most people are using CTV to visit ad-free zones like Netflix. While Netflix does take a big share of CTV viewing, comScore reports that others are catching up. Netflix was in 75% of U.S. homes in late 2016, but YouTube, Amazon and Hulu were in 53%, 33% and 17%, respectively. In addition, all of the major networks now have streaming services/apps. All of these OTT streaming services provide opportunities for advertising. 
  4. The metrics aren’t there yet. If you run a display ad, you can expect to see metrics about who saw the ad, for how long and whether there was interaction. With TV, the standard measurement has been self-reported data from viewers to Nielsen. But some startups like Verance, Alphonso and Sorensen are tackling the measurement issue using various techniques (including listening to audio) to determine if an ad has run. GroupM is also providing real-time metrics for CTV viewing. 
  5. You have to work with a network or set-top box provider. Most DSPs don’t offer CTV as an option, so adding connected TV is an extra step or two. That said, the days when advertisers needed to place buys with a network or set-top box provider are drawing to a close. More third party firms are getting access to CTV inventory, making adding CTV to a media plan fairly easy. 

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The ad industry has gotten more adept at embracing new media technologies. The speed in which it is adding CTV to the ecosphere is probably faster than we’ve seen in the past. That means if you’re thinking of adding CTV to your media plan, it’s probably easier than you think. If you’ve never tried TV, this might be an easy way in. If you’re a regular TV advertiser and are worried that when consumers cut the cord that they’ll cut your brand off as well, then it’s time to give connected TV another look. 

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