Marketers remain hesitant about CTV

Marketers remain hesitant about CTV

A lack of understanding of the benefits and perceived high costs are holding back investment in connected TV (CTV) advertising, a Teads report has found.

Justin Taylor, managing director at Teads UK, said the study revealed “a certain degree of hesitancy amongst marketers over the value of ad-supported CTV”.

Nearly half of marketing decision-makers (49%) “do not understand the key advantages” of CTV advertising and 35% cited cost as “the main drawback of CTV advertising”.

A third (33%) of UK consumers watch big sporting events at home via a CTV device — something that Taylor said presented an opportunity for advertisers around the FA Cup, Men’s Euros, Premier League and the Olympic and Paralympic Games.

Analysis: Siloes remain

Other CTV experts cited factors potentially holding back spend including agency models and education.

Matthew Bailey, senior principal analyst, advertising, at Omdia, told The Media Leader: “I think the biggest reason is linked to how many respondents identified that they don’t understand the benefits of CTV and that is due to the fact that CTV is still in a bit of a no-man’s land when it comes to budgets and buying teams.”

For some agencies and advertisers, Bailey explained, CTV remains the responsibility of linear TV buying teams, who are still focused on legacy buying approaches.

At the same time, some CTV budgets come from digital buying teams, who are “well-informed about the data-driven capabilities of CTV” but less experienced at planning campaigns around content schedules, for example.

While Bailey recognised that some teams now operate “on a converged basis”, “siloes” continue to exist in “most cases”, meaning CTV can still “get lost between the cracks”.

Alice Beecroft, senior director of global DSP strategy and partnerships at Yahoo, agreed that the planning and activation of CTV “in many cases” is being “held within the TV teams”, who are “not yet taking full advantage” of all that digital advertising has to offer.

Alien environment

Guillermo Dvorak, managing partner at Total Media, echoed this point, explaining that in “big networks with very siloed departments”, broadcast teams view online as “a very alien environment”, so they are “missing out on effective targeting”.

While Total Media spends time cross-training its broadcast and digital teams to understand each other’s work, Dvorak acknowledged that CTV is not featured “as often as we would like” because it requires “a lot of education and assurances” for brands to embrace it.

Both Beecroft and Bailey also pointed to a lack of “standardisation” and “industry-wide consensus”.

Beecroft added: “The continued siloing of measurement, hindered by the lack of broadcaster buy-in, may be off-putting here, but the direction of travel is clear, as more and more consumers are embracing CTV as a channel for media consumption.”

Comparing to linear

Dvorak also highlighted that CTV is being compared with the cheapest reach available in linear — “not a very fair comparison”. CTV’s targeting options, Dovrak argued, mean it should be compared with more premium programmes.

He continued: “Normally, brands look at it from a binary perspective, comparing TV to CTV. What we are trying to educate around is that, like BVOD and SVOD, CTV is just another way to diversify media buying, to increase reach and frequency without having to saturate the linear TV environment.”

David Grainger, senior vice-president, head of planning, at EssenceMediacomX, said the study “hints at a bigger issue” that, even in the face of changing viewing habits, marketers want TV to “stay big”.

“One reason for this is we’ve been taught to seek addressability in all other channels and TV’s role on the plan is to reach everybody,” he explained.

Quality and price

Beecroft suggested that the cost of CTV advertising compared with linear TV advertising was “largely equitable”, so advertisers already using one channel would find “clear benefits” in the other.

However, marketers who have primarily put “the large majority” of their budget into social or the open web may see things differently, since they have historically had low entry costs and a fast return on investment.

She added: “A jump to CTV for these largely D2C brands would represent a significant change in their business model — we would expect to see more ready to make this leap as the CTV market matures and CPMs start to fall.”

Ruth Cartwright, head of investment at Sky Media, told The Media Leader: “In an increasingly fragmented market where budgets are challenged, advertisers need strong evidence to move money out of other proven media into an area that is currently unproven. CTV means different things to different people, and the environment and experience can vary wildly.”

Bailey argued: “Yes, CTV can be more expensive on a CPM basis; but, carried out properly, it has the ability to be more effective when it comes to delivering outcomes.”

Meanwhile, Cartwright conceded that new ad-supported VOD services have not “been able to scale as quickly” as many might have thought.

She said: “It’s good to remind people that linear and BVOD still accounts for 80% of TV viewing and, with [Barb] CFlight, you can see how your linear and on-demand work together.”

Change coming

Grainger believes Teads’ study has arrived at a time when “CTV is at a tipping point in terms of broader adoption”.

Where there have been recent advancements in the addressability of TV advertising, as discussed at Connected TV World Summit in March, it was evident that “a host of AV advertisers” were not yet looking to TV to “drive the kind of addressability that the new landscape offers”, Grainger noted.

For a long time, CTV was “just pure theory” and only recently have marketers and agencies been able to talk about its reality, so objections raised in Teads’ survey are “fair”. As linear viewing gives way to on-demand, the way that brands use AV “will inevitably change”, Grainger stressed.

Media Jobs