Commentary
CTV Next
- by Dave Morgan , Featured Contributor, September 26, 2024
Yep, for many decades, hundreds of billions of shareholder value have been chasing the elusive formula of the future of advertising: TV + DR + Digitization = $$
Where are today’s bets on the likely winners in that future? For sure, the big streamers like Netflix, Amazon and Google/YouTube are favored by Wall Street. The TV companies, not so much. The Trade Desk has been killing it, and its stock price reflects it. Other DSPs and SSPs are doing well, but don’t have the same favor with public investors.
What are some of the predictable certainties of the future of CTV advertising? I believe that you can safely bet on these four playing out:
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Both long-form and short-form video win. It’s not really TikTok versus Netflix. Clearly, people are watching both long-form and short-form video, and will continue to do so for many, many years. Both formats win.
Automation and true self-serve will grow fast. Today, lots of ad-buying companies show off sexy user interfaces, but really operate as mechanical Turks behind the scenes. That will change. Software-born automation, enhanced by AI, will finally bring us true automation and self-service in CTV ads.
Small and medium-sized businesses and agencies will dominate CTV spend over time. Just as we’ve seen with social media platforms like Meta, as automated tools democratize access to CTV ad inventory and powerful targeting, smaller marketers and agencies, many of them with tight local, regional, vertical or niche foci, will grow and grow as CTV advertisers. Many will use it to amplify or boost their spend on search and social. By the end of this decade, they will collectively spend much more on CTV as a group than the 1,000 biggest brands, by a long shot.
Performance will be table stakes. While I don’t think all CTV ad campaigns will be chasing “cost per acquisition” as the only metric that matters, I do believe that full-funnel performance measurements will be table stakes in all CTV campaigns. This means that how each and every campaign performs against advertiser objectives will be critical. Yes, even for content-driven campaigns, performance will matter and will be valued in the eyes of the beholder (the advertiser and its agency).
What do you think?
Some of what you are predicting will, no doubt, come true, Dave. However there will be many eways to use CTV by advertisers and many ways to obtain revenues by streaming services---not just a single way.
What I see for the traditional TV advertisers and time sellers is that they will bring their ways into CTV---upfront selling, Nielsn ratings, audience guarantees based on broad age/sex demos, scatter sales at higher CPMs, etc. ----snd such advertisers a will probably be the largest users--spending-wise--- as they meld streaming into linear ---or the other way around---depending on how you look at it.
The problem for those who keep harping on CTV's supposed targeting and direct response mechanisms is that many mass marketing advertisers not only don't see a need for it but are unwilling to relinquish their cherished must buys and ways of buying time to accomodate new ideas. Perhaps that will change---but not until streaming's share of viewing reaches 85-90% and they have little chice but to adapt. That time is a long way off----if it ever materializes.
As for the others---search, direct response, ,small niche brands, highly selective marketers, local advertisers, small budget advertisers who do not have a media buying shop to guide them, etc. almost anything can transpire and many will go programmatic rout---but not the traditional TV advewrtisers----that's my opinion for now---but events may prove me wrong---we shall see.