Glossary

The power of CTV advertising for brands

Advertising
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Published on
July 5, 2024

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One of the biggest recent shifts in advertising is the rise of Connected TV (CTV). And it’s got a lot of brands wondering how they can optimize ongoing CTV ad efforts or how they can start advertising on CTV.

This article explains what CTV is, how CTV advertising works, and why it represents a good option for brands, especially in the context of third-party cookie deprecation.

CTV advertising brings the precision of digital advertising to a growing audience

What is CTV?

CTV includes any television that can be connected to the internet and access streaming video content beyond what is offered by traditional cable TV providers. Some examples of well-known CTV services include Netflix, Hulu, and Disney+. But CTV isn’t limited to only streaming services — it also covers smart TVs, gaming consoles, and devices like Amazon Fire Stick or Apple TV.

What are the benefits of advertising on CTV?

Interactive ads

CTV ads move away from the classic TV ad format of talking “at” the viewer. Instead, they can be interactive and allow viewers to engage with the ad directly. For example, a viewer might be able to click on an ad to get more information, make a purchase, or download an app. This creates a seamless experience between watching and taking action.

Metrics in real time

Another advantage of CTV advertising is marketers’ ability to get real-time metrics. Depending on the CTV provider, brands can gain insights into views, conversions, and engagement instantly. This also allows advertisers to optimize their campaigns more quickly, which ensures improved ROI.

Improved reach

More and more households are watching greater amounts of CTV than linear TV. And as it’s not limited to one program per channel per time slot, CTV reaches many different demographics. Advertisers will get increased ROI from the better reach offered by these broad audiences.

Better engagement

Most often, viewers are unable to skip, ignore, or block CTV ads because they’re embedded directly in the programming. The result is higher engagement than traditional digital ads, where advertisements are recognizable as such and ad blockers have become common.

Better targeting capabilities (if implemented correctly)

In contrast to traditional linear TV, where ads are broadcast to a broad audience, CTV has the ability to let advertisers target more precisely, similar to the digital advertising they already do on the web. But that’s only if advertisers have the right tools to do so.

Before getting into the details of how brand marketers can get the most out of targeting on this channel, let’s get into why an investment in CTV is a good idea in the first place — especially for brands looking to reduce their reliance on third-party cookies.

CTV’s shield against third-party cookie deprecation

Often postponed but never canceled, Google’s third-party cookie deprecation and all the complications that come with it still loom ahead of digital marketers.

The good news for brands who want to reduce or completely eliminate their dependence on cookies? CTV advertising has been developed from the ground up to operate independently of third-party cookies.

So what does it rely on instead?

First-party data

CTV platforms collect data from users during their use of the platform or device. This provides insights into viewers’ behavior and watching preferences but is limited to the use of the service itself. This is in contrast to third-party cookies, which follow users from one site to another to build a rich profile of them as a consumer.

To get a more complete picture of their audiences and thus target them better, brands will have the ability to bring their own audience signal and combine it with CTV audience signals in a way that ensures all data remains private and secure.

User-related identifiers

Historically, CTV has shared device ID or household IP addresses with the rest of the adtech ecosystem for precise targeting. In general, its use of identifiers has been less challenged than when compared with digital advertising on the web.

Part of the reasoning here is that targeting happens at the household level as opposed to user level. Also, many providers were able to keep and use this data in closed ecosystems, meaning they didn’t have to take into account regulations against the movement and sharing of user data.

But these practices are quickly becoming more regulated as CTV continues to grow, and some experts argue they are likely to be prohibited in the future.

How brands can ensure improved CTV targeting by using their first-party data

As laid out in the previous section, CTV providers don’t have the ability to onboard advertisers’ data as part of their core operating strengths.

The good news is, there are tools that can let brands do exactly this — while keeping their proprietary data private and maintaining their competitive edge by doing so.

But first, let’s outline the two most common situations brands face when they want to combine their first-party data with CTV providers:

Case 1: The provider has its own first-party data

These providers do business exclusively over their platforms and devices, for example Netflix. That means their customers sign up for their services directly and that the providers have the customer’s personally identifiable information (PII).

In this case, brands can use a data clean room to enhance targeting by onboarding their own data alongside the provider’s. A data clean room is also helpful for measurement, including:

  • attribution of online/offline sales
  • online/offline sales incrementality
  • unique reach across channels (i.e. CTV vs linear TV)

With its high rates of logged-in users, CTV makes it much more possible to compute these metrics than traditional linear TV advertising.

Case 2: The provider has some first-party data, but no PII

A great example for this situation is a classic linear TV channel that also has an online presence. In terms of data, this means:

  • They have a little first-party data from streaming on their website.
  • They have no data from the viewers watching on linear television.
  • The viewers are watching linear television on a smart TV, in which case the internet provider has the first-party data — known as segmented TV. Since segmented TV has more parties involved, collaborations can become more complex. We’ll dive into more details around this type of collaboration in the next section.

Segmented TV

In Europe, most digital TV advertising is not done on CTV but on "Segmented TV". So any data used in collaborations for the purpose of ad targeting has to rely on data from the telecommunications provider.

This type of TV advertising requires a cooperation consisting of three collaborators (advertiser, TV channel, and telco provider). This is in opposition to CTV, where there is a direct match between advertiser and publisher.

To successfully onboard advertiser data, the TV channel must first collaborate with the telecommunications companies to find out who is watching their content. Only after they have this information can they then collaborate with brands to successfully use the first-party data of both for maximally effective targeting. In both cases (telco and channel as well as channel and advertiser), a data clean room is an ideal way to collaborate on data.

Segmented TV also creates a revenue opportunity for telco companies to put themselves in a position to monetize their data by having the setup for secure collaborations in place.

Next steps

Brands investing ad spend in CTV advertising are choosing a future-proof solution. By reducing reliance on third-party data and meeting audiences where they spend growing amounts of time, this is a robust investment.

With the right strategies and tools, advertisers can target just as precisely on CTV as they do on premium web platforms. Using a data clean room, they can onboard their first-party data to a CTV provider for more effective and impactful campaigns.

Decentriq’s data clean rooms ensure that no participant involved in a collaboration can ever see or access the other’s data — not even us as the operator of the clean room. Get in touch to learn more about our growing network of CTV providers who collaborate with brands using Decentriq’s data clean rooms.

References

Recommended reading

Post-cookie prospecting playbook

Our playbook breaks down the current options available to brands for targeting audiences on the open web — and how they stack up when it comes to reaching net new customers.

Key visual for post-cookie prospecting playbook

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