Interviews, insight & analysis on digital media & marketing

Paul Gubbins: Why looking back can help our CTV industry to look forward

By Paul Gubbins, Head of Strategic Partnerships at Publica and NDA monthly columnist

There are very few industries that you can work in that allow you to look into the future & AdTech I believe is one of those.

Let’s look back: The rise of mobile Apps

What do I mean? Well, let’s look at the mobile in-app space, it used to be really hard to sell in-app audiences as everybody wanted mobile web only as these were the domains of the household brands that all of the big-spending advertisers had heard off, however, there was rarely any scale in mobile web as the majority of mobile users were increasingly spending their time in-app and a lot of today’s leading apps were still relatively unknown 10 years ago. The discovery of apps was also a lot more difficult back then as the app stores themselves were still in the process of being productised.

Let’s look forward: The rise of CTV AVOD apps

When a lot of brands think about CTV today they think of the household SVOD names such as Netflix, Amazon & Disney etc, however, advertising opportunities here are limited & the real opportunity lies in the growing AVOD app space. The Trade Desk last week put a Future of TV Report out that illustrated 72% of people surveyed preferred free or low cost ad-supported TV rather than ad-free & more expensive services and this attitude is clearly visible in the number of US consumers who are currently cutting the cord, last year it was 15% of TV viewers, in 2021 TTD predicts it will be 27% of U.S households who say they will cancel their pay-TV packages! This means a lot of the free AVOD streaming apps today that are yet to be household names will be, and at this rate much quicker than it took the mobile app ecosystem to reach maturity. Although the discoverability of CTV apps on some smart TVs remains difficult, many TV manufacturers have been quick to realise search (beyond the SVOD buttons that have bought prime real estate on TV remotes) will be a key driver of their hardware sales in the future & are investing heavily in making this feature easier for viewers and this will create a parabolic adoption of AVOD apps. Think how easy it is today to search for a mobile app, well, that’s the future of free TV streaming, no more scrolling through menu pages.

Let’s look back: The monetization model of mobile apps

App developers years ago rarely had big direct sales teams and they had to rely on a complex & fragmented layer of mediation partners, waterfalls of different mobile exchanges and a plethora of AdNets. A lot of these apps have only recently released that they have been leaving a lot of advertising revenues on the table and if they replicated the practice of header bidding (I know there is no header in app) that has proven so successful for display publishers, they too could improve their revenues overnight! However, it took the mobile app space over 10 years to see the value in moving away from waterfalls. The mobile ecosystem today refers to the practice of header bidding as parallel bidding & it is widely adopted among tier 1 ad-supported mobile apps. Mobile ad serving & measurement was also complex as the nuances of the app space were very different from the web-based environment that most ad servers had been built to support 10+ years ago.

Let’s look forward: The monetization model of CTV apps 

Smart ad ops teams at AVOD apps today have leapfrogged the mediation & waterfall period that many mobile app developers wasted time on and have also replicated the display header bidding theory from very early on in their monetization journeys, the CTV ecosystem refers to header bidding as unified auctions. Those that are still working with exclusive resellers, or have a waterfall of SSPs competing, should look at the mobile app space for learnings as the majority of advertisers that drive the mobile app developers yield higher today via a unified auction are the same buyers looking to access your tier 1 CTV inventory on an equal footing with their competitors, not behind them in a waterfall. CTV ad serving & measurement today can be complex & inefficient also if the technology being used has been architected around display video & not the nuances of OTT streaming.

Let’s look back: The rise of mobile identity & data 

One of the big USP’s of in-app advertising was the fact it had a deterministic & persistent identifier in the form of the Device ID (This was pre any ID headwinds from browsers & app stores etc). This meant that a massive 3rd party data economy sprung up to support those brands looking to target users in apps where maybe the apps did not have a lot of 1st party data to share back to buyers. It was this ID & data layer that quickly turned the in-app advertising space from a fringe area of expertise held by specialist mobile advertising agencies to a major growth area with all major brands including in app marketing on their global advertising plans.

Let’s look forward: The rise of CTV identity & data

The CTV app ecosystem is not necessarily reliant on the same app ecosystem as mobile and this means it is protected from a lot of the changes being made from the likes of Apple. It is, of course, subject to the same global privacy regulations, however, the CTV app ecosystem is quickly becoming an environment similar to the mobile in-app space that has a persistent form of identification, and a data infrastructure that is being built to support it from the likes of LiveRamp et al. The ID & data-rich environment of CTV is quickly attracting advertising budgets from those looking to extend their reach beyond traditional TV and the advanced digital-first buyers who understand how to apply data sets while targeting viewers within the premium environment of television.

To summarise: 

There are a growing number of AVOD apps that are showing professionally produced TV content and are attracting a growing number of viewers. However, they are not all household names yet but if our past can teach us anything it is this, when consumers change their habits they do it quickly & the streaming publishers who adopt the right approach to their AdTech infrastructure today are going to be extremely well placed to capture the advertising budgets that will be following the users.

Mobile quickly went from a very small part of a marketers advertising mix to be one of the most strategic components in a very short period of time.

If we know where to look in our AdTech past, our future can be seen staring right back at us. CTV publishers have a crystal ball and can take many lessons from those in the mobile app space that were challenger brands before them, with growing audiences & a new advertising infrastructure ahead of them they had to either license or build.

Streaming publishers can avoid so many of the test & learn years that cost mobile app developers millions of wasted dollars in advertising revenues, however, they must use the reflection of the past to illuminate their futures.