Will Connected TV Help Agencies Diversify their Video Budgets?

When it comes to media buying for video, there is no shortage of targeting options in terms of platforms and portals. While Facebook and YouTube are the big players, Connected TV, Programmatic TV, and Native are emerging as effective alternatives, offering agencies a wide range of options. But much must change in order for agencies to truly embrace these alternatives instead of resorting to “juggernauts” Facebook and YouTube.

Facebook, YouTube Are Simple, Cost Efficient and Visible

For those who have been in the industry for a while, the easiest way

Albert Thompson, Director, Digital Strategy at Walton Isaacson

Albert Thompson, Director, Digital Strategy at Walton Isaacson

to describe Facebook and Google in the age of online video is through the past. Albert Thompson, the director of digital strategy at ad agency Walton Isaacson, says: “Remember the era of ‘portals’ deals?  FB and Google are the new portals,” he says, because “they have the most marketplace visibility and their audience scale and understanding is almost unparalleled.”

In terms of audience reach, Thompson describes the two players as the industry “juggernauts”: but they have earned that spot because “they are the most easily understood,” and “their DIY and managed service approach integrates rather seamlessly into client planning.”

And Thompson adds that the efficiency in the cost per engagement structure allows agencies (and brands) to “keep the overall cost down, which has always been a ‘favorable’ currency for buying agencies.”  And CTV, PTV, and Native are still relatively new, which means more risk in testing, and “many agencies are surprisingly risk averse.”

Range of Formats Afford Solid Media Mix

It’s not that all agencies are so risk-averse: for example, Walton Isaacson uses Connected TV, PTV, YouTube TruView (video ads that can be created in AdWords using YouTube videos) and Native Video alongside FB Video to create a “solid media mix.”

They see FB Video as an important player, but it is still just one among many targeting alternatives.  The CTV, PTV, and Native Video partners like YUME, VDOPIA, TUBEMOGUL, and TEAD.tv offer additional unduplicated reach against key target audiences they are targeting for the brands they represent in environments where there is less competitive presence.

Walton Isaacson hasn’t stopped at just measuring clicks and visits. The agency also started to tag CTV buys with store visit tracking “to see who makes it to a Lexus dealership after being exposed to TV ads on their mobile device.”  In the future store visit behavior will be the new currency for the measuring ad effectiveness digitally.

Just think about the possibility of leveraging the TV experience with the measurability of digital advertising accompanied by store visit data.

Thompson noted that the agency is in similar conversations with Google and FB about store visit tracking capabilities.

Whether we acknowledge it or not we are all adopting and enforcing a mobile-first world. The ability to have instantaneous access to media content within seconds that is curated for you is, not only powerful, but a tremendous opportunity for advertisers and content creators.

Walton Isaacson hasn’t stopped at just measuring clicks and visits. The agency also started to tag CTV buys with store visit tracking “to see who makes it to a Lexus dealership after being exposed to TV ads on their mobile device.”  In the future store visit behavior will be the new currency for the measuring ad effectively digitally.

Just think about the possibility of leveraging the TV experience with the measurability of digital advertising accompanied by store visit data.

Thompson notes that the agency is in similar conversations with Google and FB about store visit tracking capabilities.

Stats Suggest Connected TV, Mobile Are Catching Up

Studies have shown that certain demographics are using smartphones as much as they watch TV. For example, Nielsen has reported that in the second quarter of 2016, 18-34 consumers in the United States averaged 18 hours and 27 minutes of TV usage per week, while they used smartphones for an average of 14 hours and 36 minutes.

So it’s no surprise that the biggest threat to TV may be the small screen on people’s cell phones. “Whether we acknowledge it or not we are all adopting and enforcing a mobile-first world,” says  Mike Villalobos,VP of Sales at FuelX, a direct response video distribution platform. “The ability to have instantaneous access to media content within seconds that is curated for you is not only powerful but a tremendous opportunity for advertisers and content creators.”

Mike Villalobos, Vice President of Sales, FuelX

Mike Villalobos, Vice President of Sales, FuelX

And mobile isn’t the only force changing the way we watch video. Consumer marketing firm GkF claims that four in 10 consumers have a smart TV, and that more than a third (36%) own a digital media player like Roku, Google Chromecast, Amazon Fre TV and Apple TV. According to eMarketer, programmatic TV has seen solid growth increasing by 127% YoY.

Villalobos says that “key to all of this is its ability to leverage data that goes beyond a general demographic and enables marketers to get an affinity understanding of the consumer.”

But the emerging alternatives already offer qualities that Facebook and YouTube do not. When it comes to Connected TV, Thompson says, it “sits under the Addressable TV umbrella, meaning the ability to ‘address’ an ad down to the household level. In that sense, “CTV melds the best of both worlds – TV viewing experience on familiar devices with digital metrics (impressions, clicks, down stream click actions).” And AdAge reports that natively posted videos are getting better organic reach than posts featuring videos that are hosted elsewhere.

Innovation Comes with Challenges

But as consumer behavior and technology evolves, the industry will need to catch up, agree on standards for buying processes, metrics, and privacy. Villalobos explains: “With every innovation comes challenges and with PTV it's the need for an effective and efficient buying process and access to limited inventory, which inherently brings scaling issues.” And while PTV will grow and budgets will start to shift as a result, “this may take a decade's time due to its large contingency on consumer adoption of smart TVs.”

You have to carry a mantra of being willing to ‘disrupt’ yourself constantly.

And while online video is exploding, it “is constantly under the microscope for fraudulent traffic, incentivized actions, misreporting, "Black Box" solutions, antiquated attribution models (digital marketing as a whole), and questionable data platforms.” In this sense, “it shouldn't come as a surprise when Facebook and YouTube are the de facto video solutions for most advertisers and agencies.”

PTV’s growth has also been slowed by legislative restrictions to real-time bidding: in the US, ads must be approved by the network, scripts are vetted, and revision for legal notification texts and evidence to support claims must occur before airing. While the powerful combination of third-party, offline consumer data and real-time TV viewing data is changing targeting approaches, there are also privacy concerns, as personally identifiable information (PII) is heavily regulated in many countries.

Looking at programmatic TV, targeted inventory is delivered through multichannel video programming distributors (MVPDs), but only two minutes out of 15 total hours of advertising content are left as programmatic inventory. This is mostly because broadcasters do not want to lose revenue as CPMs go down under programmatic. And the industry has yet to discover a way to implement anything like traceable cookie IDs in linear TV.

But Facebook and Google are Convenient and Scalable 

In the end, Facebook and Google are still the most convenient options. “Facebook not only has terabytes of self-reported profile data that is continuously updated, but also creates a customized experience for the user by providing accurately curated content,” Villalobos says. “This user-centric experience has yielded a ton of success as Facebook averages over 8 billion views per day.”

“Facebook's daily video consumption rate inherently makes them a powerhouse. Their data, campaign customizations, and ability to deliver a ROAS makes them a safe bet for video advertisers no matter what the company size,” he adds.

If ad tech companies can deliver a transparent solution that yields value beyond standard soft metrics such as viewability/view rate, advertisers will feel much more comfortable testing outside the two media juggernauts that are Facebook and YouTube.

And YouTube, on the other hand, has Google, whose parent company, Alphabet Inc., “enables savvy advertisers to not only host their video on the world's largest online video repository, but also leverage the Google environment full circle and get the transparency of data they want,” Villalobos explains.

In the end, “If ad tech companies can deliver a transparent solution that yields value beyond standard soft metrics such as viewability/view rate, advertisers will feel much more comfortable testing outside the two media juggernauts that are Facebook and YouTube,” Villalobos predicts.

Essentially, anyone in this industry “has to carry a mantra of being willing to ‘disrupt’ yourself constantly,” says Thompson.


Gretchen Gardner @gardnergretchen

Gretchen is a communications specialist and owner of GMG Strategic Communications. She currently lives in Buenos Aires, Argentina, where she works with Argentine and international ventures on shaping their content, branding and marketing strategies to position them for success in global markets. She is also a lover of all things information and has worked consistently in journalism since college, most recently as a writer at Portada and as the deputy editor of The Bubble, the first informal, English-language news portal in Buenos Aires. She hails from Washington, D.C. and has a bachelor's degree in history and Hispanic studies from Hamilton College as well as a master's in international relations from the Argentine university Universidad Torcuato Di Tella.
Gretchen is a communications specialist and owner of GMG Strategic Communications. She currently lives in Buenos Aires, Argentina, where she works with Argentine and international ventures on shaping their content, branding and marketing strategies to position them for success in global markets. She is also a lover of all things information and has worked consistently in journalism since college, most recently as a writer at Portada and as the deputy editor of The Bubble, the first informal, English-language news portal in Buenos Aires. She hails from Washington, D.C. and has a bachelor's degree in history and Hispanic studies from Hamilton College as well as a master's in international relations from the Argentine university Universidad Torcuato Di Tella.

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