Connected TV, or CTV, is a big opportunity for performance marketers to find and engage with new audiences. CTV is video content delivered through internet-enabled devices like smart TVs or streaming devices, and includes streaming services like Netflix, Hulu, and Apple TV. It offers the precision of digital matched with the impact of television, and it’s a huge market: 70% of US consumers stream content across multiple platforms.
That said, connected TV targeting challenges can be daunting. Advertisers today are used to the streamlined ecosystems of search and social, but CTV is very fragmented: it’s essentially a system of walled gardens, disparate devices, and data siloes. Measuring return on ad spend (ROAS) for CTV can easily become a nightmare for performance marketers.
Since connected TV is closely related to OTT (or over-the-top advertising, which refers to video ads delivered directly to viewers over the internet on streaming platforms), the advertising challenges are similar for both, although OTT ads can also include mobile or desktop ads.
This guide explores the targeting and fragmentation challenges facing performance teams, and identifies the strategies needed to turn CTV into a measurable growth channel.
Why CTV Fragmentation Kills Performance Campaigns (And How to Fix It)
The connected TV marketing segment offers a lot of promise and can be lucrative for advertisers, but CTV audience fragmentation presents a big challenge. Fragmentation shows up as a series of data siloes across original equipment manufacturers (OEMs), publishers, and operating system (OS) providers, making it different from other siloes, e.g., simply a high volume of apps.
For marketers and advertisers working in CTV, these siloes can easily lead to budget waste through unmanaged frequency. Instead of setting and forgetting ad buys, teams should use a CTV frequency capping tool to limit the number of times a user or household sees a specific ad on streaming services over a set period of time. This helps to prevent ad fatigue and optimize budgets.
Identity Crisis: Targeting Households Without Cookies
When adding CTV to a performance marketing strategy, there’s a technical shift from the 1:1 pixel tracking that has traditionally captured user behavior, to IP-based household targeting. Household-level targeting is a digital ad capability that matches postal addresses with IP addresses to deliver ads to a specific home across phones, TVs, and laptops. It’s a way to send digital mail directly, without using cookies.
To bridge the gap between TV exposure and mobile conversions, marketers can use identity graphs and deterministic data. This CTV identity resolution is essential for gaining a unified view of households or viewers without cookies.
CTV identity graphs are databases that create a cohesive view of a user or household profile using devices, apps, and other fragmented user identifiers. This enables advertisers to match their customer email list with the identity graph to target users on streaming platforms.
Deterministic data for CTV is first-party, accurate data that users provided, like email addresses, login IDs, or device IDs. This information allows advertisers to identify individual users or households for CTV advertising with privacy-compliant targeting and accurate attribution.
Overcoming Measurement Blind Spots in a Fragmented Ecosystem
As you’re exploring any new advertising channel, unified measurement and metrics should be top of mind, and that’s no different with CTV. But, CTV performance marketing measurement brings unique challenges. You may know that a majority of consumers are watching connected TV, and the ads that pop up, but it isn’t as straightforward to understand how users are engaging with or acting on those ads. This contrasts with walled garden options like Google and Amazon, which make cross-screen attribution easy for performance marketing teams.
Connecting big-screen views to small-screen actions, also known as cross-device attribution, is the primary job of CTV performance marketers. Cross-device attribution in CTV relies on two solutions: automatic content recognition (ACR) and incrementality testing.
ACR technology samples content at the screen level to identify viewing habits, using audio and visual fingerprints. Advertisers can measure viewership as well as target or retarget specific audiences and manage ad frequency.
CTV incrementality testing, also called lift testing or causal impact analysis, puts users into test and control groups to see how many actual conversions were driven by ads. It quantifies the lift by comparing conversion rates to demonstrate whether CTV ads led to new sales, or simply captured organic ones.
Consolidating Your Ad Buy: Programmatic vs. Direct IO
In addition to tackling the measurement challenges of CTV, it’s important to understand programmatic CTV vs. direct IO — the buying methods for CTV advertising. Direct IO is the more traditional method, a direct agreement between an advertiser and publisher to buy premium inventory at a fixed price and time. Because it isn’t flexible and works only with one publisher or service, direct IO increases fragmentation.
A programmatic DSP, or demand-side platform, is a more modern method of buying streaming ad inventory, and generally better suited for CTV performance marketers. A programmatic DSP software platform automates the buying of streaming ad inventory for smart TVs and apps with real-time bidding that’s informed by data. Advertisers can target specific audiences instead of buying broad linear TV spots. These platforms also allow for unified frequency control and dashboard management, which marketers will find similar to social platform dashboards.
Leading CTV providers like Paramount Advertising and LG Ad Solutions have adopted Realize’s performance marketing tools to drive performance, by retargeting users across smart TVs and personal devices using audience matching. This functionality helps marketers use their budgets more wisely and move beyond awareness advertising into performance-driven marketing.
Key Takeaways
CTV is a newer market for many performance marketers, but modern ad platforms and strategies can help marketers get control over the frequency and attribution of placements, allowing for household level targeting. While it’s a fragmented market, with multiple services and publishers, marketers can shift to household identity graphs and programmatic consolidation for better results.
Frequently Asked Questions (FAQs)
How does audience fragmentation affect CTV campaign performance?
Audience fragmentation in CTV creates data siloes, making it harder to see if you’re reaching the same person across different apps. Without a unified view, it’s easy to overdo the frequency of ads, wasting spend and complicating measurement. It’s difficult to calculate a true cost per acquisition (CPA) or return on ad spend (ROAS) without trustworthy attribution data.
Can I target specific audiences on CTV like I do on Facebook?
It’s possible to target specific audiences on CTV, though the method differs from targeting on a platform like Facebook. Instead of tracking user pixels, use identity graphs to target households. These databases target new audiences based on IP addresses, first-party data, and third-party segments, like auto-intenders.
What is the best way to track conversions from CTV ads?
Tracking conversions and measuring ROAS on CTV requires different methods than other types of performance marketing campaign measurement. Users can’t click on a TV ad, so you should track CTV performance with cross-device attribution. This is the best way to track conversions from CTV ads, since it links the IP address of the TV that showed the ad to the mobile device or laptop where the purchase eventually occurred. Deterministic data can also help build a more comprehensive view of CTV ad performance.
