There 's a reason so many CTV advertisers today -- particularly those that are performance-focused -- are watching their campaigns hit plateaus much faster than they had anticipated.
TV is now being discovered by tens of thousands of new advertisers each month, many entering through new self-service buying platforms, attracted by the familiarity of online ad buying, audience
targeting and real-time measurement and reporting.
Most of these “new to TV” advertisers have taken the same well-trodden path from the direct-to-consumer movement.
Their
companies are app- and ecommerce-heavy and they start their marketing with search and social ads, loving the hyper targeting and small entry budgets.
Once they find product/market fit, they
maximize their increased spend not just on search and social ads, but also on performance banners, affiliate networks and email.
Cost-per-acquisition (CAC) is the captain of the ship, driving
all budget decisions. Of course, for so many of them, the performance eventually plateaus.
advertisement
advertisement
As their sectors become competitive, ad pricing goes up and their CAC goes down. Once they exhausted
the digital performance channels, many then moved to TV, and CTV particularly, since linear and its “analog” heritage and practices seem so foreign.
But, alas, so many have found
their CTV campaigns and CAC are plateauing too -- just as happened with their other digital channels.
The inevitable questions arise: Are my audience targets wrong? Am I buying CTV ads on the
wrong platforms? Do I have the wrong agency or platform partner?
Maybe the real question they should be asking is whether CTV in the U.S. today has the inventory scale to be a
performance channel comparable to search, social and banners.
In fact, there’s only so much real CTV inventory out there. It’s true that 50% of content viewing time on TV today is
on streaming, but because so much of streaming video is ad-free or ad-light, only 15% of ad viewing time on TV is streamed. And the majority of the streaming ad inventory is pre-bought in upfront
deals or sold together in linear-forest deals with the ads pre-integrated into the feed.
This leaves little true CTV ad inventory available on digital SSPs and DSPs, and what’s there is
priced upwards.
Of course, less reputable platforms and companies out there seem to have no issue with “loose” labeling of CTV inventory when they put it on exchanges, frequently
putting the CTV label on web video, apps with sound off, PC video banners, etc., creating little surprise that the CAC on those is bad, since they aren’t worth anything close to the 5-10X
pricing premium of CTV.
What’s the answer for the CTV performance plateau? It’s simple: Extend your reach on linear TV.
Linear TV has lots of efficient supply and suppliers
with strong data-driven targeting, automation in the back end, and closed-loop reporting and automation that can help you control your scaling while watching your ROI.
And local TV, which used
to be super-expensive relative to national cable, is now much more affordable if you can be flexible about specific shows and dayparts and avoid the hottest political buys (mostly news) in the
election run-ups.
What do you think? Isn’t it time for performance-focused digital advertisers to dip their toes into digitally automated and data-driven linear ads on TV?