The industry has been talking about the need for broadcasters to evolve and adapt their business models for years. Now we’re starting to see significant movements – from ITV’s roll out of Planet V, to the launch of Salto, a joint SVOD service released in France by M6, TF1 and France Télévisions, to RTL and ProSiebenSat.1’s partnership on addressable TV advertising in Germany.
But what are the next steps necessary to evolve broadcasters’ and CTV platforms’ businesses even further? In this piece Emma Newman, CRO EMEA at PubMatic, outlines to importance of data, programmatic trading, and measurement for the next generation of broadcasters.
Over the past few years, connected TV (CTV) viewership has been growing steadily and in response linear broadcasters have had to act. The COVID-19 pandemic has accelerated this growth and created a sense of urgency for broadcasters to transform their offerings in order to remain relevant and future-proof their businesses. In the UK, Channel 4 and ITV have laid out their plans to pivot from linear-first to CTV-first in order to compete with new streaming platforms entering the market and rapidly gaining market share.
Eyeballs and budgets
As we’ve seen in the past, when new channels emerge there is often a lag between the rate of consumer adoption and the alignment of ad spend. Recent research conducted by VideoWeek and PubMatic reveals that the lag in CTV ad spend investment is largely due to the huge difference between the amount of revenue currently generated from linear TV compared to the current potential of CTV and a continued view that they should be treated separately. This is a myth that needs to be dispelled in order to grow the CTV advertising industry. From a consumer perspective, CTV and linear TV are very much the same thing – content watched on the biggest screen in the house. Broadcasters and advertisers need to adopt the same mindset and leverage both channels in a cohesive way.
In order for budgets to catch up with eyeballs, broadcasters need to package and price CTV and linear advertising inventory in a way that enables advertisers to reach target audiences no matter what platform them are on. In turn, media buyers need to define the role and purpose of each, and plan budgets based on how they perform against the desired goal. The faster people understand it’s not a competition, the shorter the lag will be.
Unravelling complexity and pushing forward
There’s no denying that CTV presents intricacies that have not previously been encountered on ‘traditional’ digital or TV platforms and that we need to create solutions to overcome the challenges that these bring. On the sell-side it comes down to making premium CTV inventory addressable and easily accessible in order to enable buyers to achieve scale and avoid negotiating an extremely fragmented market. This will justify the effort the buy-side needs to invest into incorporating CTV into their media mix in a brand-safe, targeted, and measurable way. Ultimately, it comes down to having a consolidated sales approach with broad and narrow targeting options to enable advertisers to achieve success.
Data will play a huge role in CTV – for the first time linear broadcasters have first-party data that they can use to build targeted audiences. This opens up CTV to a bigger pool of advertisers, including many SMEs for which TV has previously been too expensive or too broad. Creating effective data tools is not turn-key, it involves careful collection, management, and analysis of data as well as integration with buying tools which takes time. Furthermore, brands will want to layer their own first-party data onto broadcasters’ data in order to maximise control, transparency, and return on investment (ROI). For both the buy- and the sell-side first-party is an untapped opportunity and will be a driving force behind the development of CTV.
As an industry, we’ve done a great job of simplifying programmatic and there is huge potential for programmatic in CTV. In order to capitalise on the opportunity there are a lot of exciting technical innovations emerging to make CTV inventory available through programmatic pipes. These solutions are being designed in a way that gives CTV content sellers and advertisers the level of control required to ensure that inventory is traded between SSPs and DSPs in a fair, transparent way and measured against a common standard. By taking this approach from the get-go, we’re priming the programmatic CTV industry for rapid growth and success.
As the technology behind CTV advertising evolves, there is also a need for a change in mindset and approach that takes a blended view of CTV and linear TV and adopt a holistic view of ‘TV’ and develop a strategy around where and how target audiences consume TV content, regardless of the access point.
Linear TV ad trading has always been done in a highly controlled way with a finite amount of inventory available which lends itself to structured planning. On the other hand, there is an infinite amount of CTV advertising inventory that can be bought in real-time and offers a huge amount of flexibility in targeting and pricing models. It’s likely that programmatic guaranteed and private marketplaces will be buyers’ first choice enabling them to experiment with CTV in a highly controlled way.
What will broadcasters look like in 2021 and beyond?
CTV is simply a way of distributing content, thus, never has it been more true that content is king. The arrival of CTV does not mean that content made by traditional broadcasters is no longer relevant or is no longer what consumers want to watch – they just want to watch it in a different way. Evolved broadcasters will understand this and create different products and options for consumers, e.g., highly-specialist content, genre-specific content, as well as mass-appeal programs. This will enable them to offer buyers the ultimate combination of scale, targeting, and addressable audiences to meet the goals of any campaign.
Advanced broadcasters will also be able to offer measurement options that span both linear (reach and frequency) and digital (ROI). This will enable buyers to take an omnichannel view and make better, data-driven decisions and move budget from channel to channel in order to create the optimal omnichannel presence.
Lastly, collaboration will be key. It’s clear to see that CTV is vastly different from anything we’ve seen before but shares many of the same attributes of established channels. We are in a strong position where we can use the learnings from the past two decades to hit the ground running. Exactly what these partnerships look like is still to be defined and will vary. For broadcasters, collaborations with streaming devices and platforms will be key but only to the extent required to reach optimal distribution. Larger players will rely less on these types of partnerships but for smaller content producers these will be essential to achieving the scale of audience that is required to succeed.
Tech collaboration will also be important, broadcasters and advertisers should look to partner with platforms that are committed to growing market intelligence and investing in innovation. There is still a lot to come in CTV and to realise its potential will require true differentiation and specialisation from the sell-side in order to provide buyers with solutions that deliver value.