Interviews, insight & analysis on digital media & marketing

What can we expect next for CTV?

 By Hunain Khan, Director, SSP, Xandr

Connected TV (CTV) and over-the-top devices (OTT) have been touted as a priority solution in digital advertising for some time now. Throw in the covid-19 pandemic and CTV use has exploded throughout 2020 and 2021. As we head into 2022 it is important for brands to understand which trends are worth following and which are just background noise. Below I have outlined three key trends and how everyone in the industry can learn from these.

Walled gardens vs contextual

Currently, with third-party cookies still in play, activity run outside the walled garden can be audience targeted to some extent. But with the loss of third-party cookies looming, alternatives will need to be found.

Establishments with their own first-party data will be focused on setting up a walled garden, which means any inventory across the open web will most likely rely on contextual targeting. This “new normal” will allow advertisers to look for alternative options within the contextual space.

CTV is also now likely to become a viable option on any media plan as it has proven to be more viewable and impactful than standard video campaigns, as well as more measurable than linear ones. Therefore it’s more likely to gain a higher percentage campaign budget that it might currently have.

As context becomes king again, projects like IRIS, Mantis and Xandr’s Video content metadata will take centre stage. The demise of the third-party cookie will inevitably benefit contextual buying across non walled gardened premium environments and a large majority of this inventory will be accessible via CTV formats. 

CTV commerce is the future

Picture this, you’ve just been paid and you’re sitting there watching your favourite Gossip Girl episode for the 11th time. You love the coat your favourite character is wearing. You click the “up” button on your remote and there it is, a link to the Prada coat along with a QR code that you can scan with your phone, which takes you directly to the retailers or stockist’s site. Welcome to CTV commerce.

It’s often said that China is a looking glass into the future for the west when it comes to the world of tech. This could not be more accurate with society engaging more and more in social platforms such as TikTok across key global markets in the past three years. If there’s one thing TikTok has proven other than forcing one to procrastinate, it’s the effectives of embedding relevant commerce ads within engaging social feeds. Gen Z are growing up with concepts of social commerce firmly embedded in their heads and as they move away from phones and over to connected TV environments, they’ll be buying shoes off the TV the same way previous generations bought things off QVC.

The age-old problem for any TV buyer has always been attributing sales uplift to a purely linear TV campaign. Due to the lack of reporting or targeting, it can be extremely difficult to associate spikes in sales with spikes in tangible conversions/footfall. CTV commerce across connected devices can and will solve this by closing the loop using technology such as onscreen QR codes, which attribute conversions back to the first touchpoint.

CTV reaches the growing proportions of ethnic minorities

Having your channel listed on a traditional set top box is quite a large financial obligation for some channels. For years minority focused TV channels have been streaming their content in the form of IPTV to reach those who wanted a taste of home. Now that smart TVs have application functionality built within them, we’re seeing a boom of adoption of CTV devices and viewership amongst diverse and ethnic minorities.

It’s often recognised by behaviourists that diverse audiences tend to create their own social bubbles which creates significant brand loyalty that can potentially run generations deep. For example, when my grandad arrived here in the UK in the 1950’s he was directed to Marks & Spencer’s for his sock needs. 70 year’s later he’s still buying socks from M&S and so am I. A linear TV buy across ITV and Channel 4 would never reach my grandad as he only watched the 9pm news on BBC, however, a CTV buy which includes channels such as Zee5 and HumNews that aren’t available via linear, would. 

Some of the largest advertisers have now started to understand the value of targeting diverse audiences, as they understand this is where their growth is likely to come from as they’ve hit a point of diminishing returns with their usual target audience. Think of Facebook diversifying into satellites to provide fast speed internet to Africa (the only continent they didn’t have majority market share in). Brands that have traditionally found it difficult to speak to ethnic minorities or target diverse audiences via traditional linear TV advertising, now have the ability to reach this audience organically by simply adding an additional format to their plan. 

As the world heads towards the end of the third-party cookie and murmurs of an impending recession take hold of the economy, brands are going to want to ensure every advertising dollar is driving results. This will be an increasingly difficult task to prove across traditional linear TV. On the digital video front, as CTV matures and measurability and tracking falls in-line with instream/outstream formats, we’ll see a natural shift in budgets away from traditionally less impactful and low viewability formats. This will be further amplified by commerce related technological advancements in the format itself, allowing brands to work towards ROI, rather than pure reach. All of this combined with the potential to penetrate diverse audiences, will make CTV a key tool in every marketers’ toolbox.

Xandr is a client of Bluestripe Communications, owned by Bluestripe Group, the owner of NDA.