CTV Suppliers Need Identity to Maintain Margin

CTV Suppliers Need Identity to Maintain Margin

By James Hsu, VP Identity Products, Adstra

Connected TV is having its moment in the spotlight with both consumers and advertisers. Streaming now has the largest share of TV time, greater than broadcast or cable. Agencies are expected to spend 53% more on CTV advertising this year compared to last year. And political campaigns will put nearly $1.5 billion into CTV this year alone. Platforms like Netflix and Disney+ are launching ad-supported tiers to appeal to both budget conscious-subscribers and audience-hungry advertisers.

Rolling out ad products amid increased spending is great. Doing so in a strategic, measurable way is even better. Thus far, most CTV platforms seem to be launching with the bare minimum number of features. Whether they are aggregators or the top streaming platforms, CTV suppliers need to devote time to an identity strategy. Without one, they are leaving money on the table.

How Identity puts the real C in CTV

A complicated problem

CTV has lagged behind in adopting identity because it is an incredibly difficult problem to solve within the medium. TVs are not the same as desktop browsers or mobile devices, which allow the use of identifiers that can connect browsing behavior to potential interests.

There are email logins for some CTV services, but there are several different ways for subscribers to access those apps. For example, a consumer can access HBO Max content by subscribing directly. They can use a platform like Roku or Apple TV to download the app and activate a subscription. Up until 2021, viewers could also access HBO Max via an entirely different subscription service, Amazon Prime Video. On top of all that, most subscribers to the HBO cable channel also get access to HBO Max.

That’s a lot of entry points, so it becomes very difficult to understand viewing habits and behavior insights, and then connect them to an identifier. Some services don’t even have logins in order to access their ad-supported models. Meanwhile, churn is a huge issue. It’s hard for third-party companies to apply their data in a meaningful way, thus helping brands improve their performance across the channel.

That last bit is critical, because if brands are going to spend billions of dollars on CTV going forward, they want to know that their ads are working, and optimize so that they are getting more from their budgets.

Assessing the data

Fortunately, CTV content suppliers are sitting on a wealth of insights in the form of contextual data. They know what programming is popular, how much of it viewers are watching, and when they’re watching it, relative to release.

What providers need to do is connect this contextual data with interest-based trends from outside of the CTV walled gardens. They need to access insights stemming from a first-party relationship with the consumers in order to fully activate identity.

Brands are taking the initial stages toward developing their own identity solutions that can extend across channels. These solutions are built around brands’ own first-party relationships with their customers, and they are built to withstand cookie deprecation while remaining privacy compliant. That’s a great starting point.

Understanding the opportunity

As it gets easier to translate an anonymous ID (linked to a viewer of an AVOD app or channel) with a known ID (tied to a brand’s first-party data), CTV providers still seem hesitant. Many are extremely protective of their data and contextual insights. There is a fear that sharing too much information will deflate CPMs and erase any prestige from their ad products.

One could argue that being overly protective will have the same result. The current influx of spending is spread across the streamers as advertisers try to understand this emerging medium. Eventually, they will spend where they can find performance and results. In all likelihood, that’s going to be with partners who can connect multiple data sources to better understand the viewer on the other side of the screen.

Rather than fear that identity will deflate CPMs, CTV suppliers that fail to do so will watch their ad supply become much less desirable. Any gains made during the initial gold rush will eventually disappear.

Streaming content owners who aren’t eagerly adopting identity solutions are likely already behind in the monetization process. Protecting CPMs isn’t about obfuscation, but about making the ads themselves more useful to the brands. That’s only possible with the use of identity.

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