With Google set to phase out third-party cookies starting middle of 2024, it seems marketers have already begun the process of having more direct communication with consumers. One such way is through connected televisions (CTV). This move, driven by concerns over data privacy and consumer consent, is potentially reshaping the advertising industry as we know it. “Internet models and users are growing rapidly, which means that ads on digital have increased. On CTV, users binge-watch and don’t switch content during ads, so engagement is deep and continuous enabling higher ad impressions. On TV users switch channels or content as soon as ads appear,” Nikhil Dalal, director, Redseer Strategy Consultants, told BrandWagon Online.
Smart-connected TVs will exceed 40 million (daily active users) by 2025, thereby ending the monopoly of broadcasters on the large screen and leading to around 30% of content consumed on large screens to be social, gaming, digital, and others, as per this year’s FICCI-EY Media and Entertainment Report. OTT aggregation will be a key driver of growth on CTV, the report added.
Ensuring data privacy and compliance
While CTV allows targeted communication, privacy remains a massive area of concern on issues like the collection and use of consumer data. For example, some CTV platforms may collect data without the viewer’s knowledge or consent, or they may share data with third parties without the viewer’s knowledge or consent. Another privacy-related issue is the use of third-party cookies. Currently, third-party cookies are used for a viewer’s browsing history. This allows the platform to serve ads to specific audiences. However, these cookies can be used to track a viewer’s activity across multiple sites, raising concerns about privacy. With the roll-out of the Digital Personal Data Protection Bill in India now, CTV platforms will have to clearly communicate to viewers what data is being collected and how it will be used. Advertisers should also provide viewers with the option to opt-out of data collection and sharing. Another way to address privacy concerns is through the usage of technologies such as differential privacy to ensure that data is collected and used in a way that respects the viewer’s privacy. Moreover, advertisers can also limit the use of third-party cookies by using first-party cookies or other technologies which do not require the collection of personal data. “As compared to the world of browsing and user-generated content on other mediums, CTV is a bespoke platform that offers personalised medium for advertising needs as viewers control what they want to watch, whether it is OTT, news, music, or gaming. Interestingly, the ads that are shown on the CTV space are also controlled by these genres/formats. For instance, an OTT app would decide which ad they can play on which content and what is the time band. This makes CTV ads more brand-safe and ensures users’ privacy unlike a desktop or mobile web targeting user cookies or browsing history,” Nikhil Kumar, VP, India and SEA, mediasmart, stated.
The mechanics and the reason
Usually, there are two to three ways to sell inventory on CTV platforms. The first is programmatic but within this, the approach can be divided into three ways. The first approach is the old style of programmatic and demand-side platforms (DSPs) and ad networks are the easiest way to start. Next are self programmatic advertising platforms. These platforms tend to be DSPs which grant access to ad channels, publishers, among others. MNTN, Vibe.co, TvScientific, Taboola, and AdRoll are some of the DSPs. The third way is called managed programmatic ad services. Under this a third party team which acts as an extension of an advertiser’s team, and manages and operates the programmatic campaigns. “CTV has made the traditional world of television advertising more intuitive and engaging because of the precision targeting it offers along with the ability to measure and optimise campaigns with programmatic technology. By offering a diverse range of options for brands to deploy various strategies for not just targeting but also engaging their audiences, CTV helps to improve targeting and impact brand recall and uplift”, Nikhil Kumar, VP India and SEA, mediasmart, Affle explained.
Secondly, ads can be directly purchased from CTV platforms under the process called, ‘Platform direct’. This process at times can be beneficial as it allows to place ads at a lower rate with more placement options. For example, Amazon Fire TV and Roku offer clickable display banners, which tend to yield lower eCPIs than a typical mid-roll ad. While, smart TV partners such as Samsung Ads and Inscape, for example, offer native placements across linear TV as well as CTV. Lastly, in the case of publisher direct approach, the ad exchange takes place directly with the OTT service provider. Under this OTT ads give more control to advertisers over where ads are placed with guaranteed placements in specific programs or channels or platforms like Fox Now on Hulu, and with premium ad spots that are otherwise not always available for supply-side platforms (SSP).
According to Pranav Bakshi, head- digital video strategy and partnerships, Network18 with no cookies, brands will need to rely on data sources, contextual targeting and creative strategy. “To begin with they will need to look at CTV for additional reach, utilising the new formats of ads, geo targeting and premium audiences. While geo targeting is an effective cost solution, brands should look at customising and contextualising ads to achieve a better engagement,” he added.
On CTV advertisers can release two-three kinds of ads. This includes in-stream video ads. One of the most common forms of ads these are available across all platforms and can be integrated into streamed content while it’s being watched. Next, are video ads which are usually 15-30 seconds long, and can be either pre-roll, mid-roll or post-roll. Display ads (home screen placement / inline placement) are a common form of ads on the home screen. These ads are an overlay while the content of choice is being streamed. Display ads are usually smaller in size, so as not to overtake too much screen real estate.
As per market intelligence platform, Statista, CTV audiences were more willing to watch ads than their linear TV counterparts, according to a survey conducted in August 2022. About 45% chose to engage with relevant ads while another 40 percent had better ad recall than DTH/cable users. Futhermore, a recent Nielsen study found 92% of adults aged between 18 and 49 years live in homes with CTV access. Another Samsung study found consumers spend around 80 minutes per day with ad-supported streaming content. These numbers indicate CTV has become a scalable advertising medium that does not rely on cookies. “In a post-cookie era, leveraging Connected TV (CTV) advertising offers key benefits for brands: targeted advertising without cookies, highly immersive content on large screens, cross-device targeting, measurable insights through analytics, and contextual, relevant ads based on content. CTV empowers brands to adapt to evolving digital advertising landscapes effectively,” Priti Murthy, president, GroupM Nexus explained.