What Buyers Need To Know About CTV Terminology

In this guest post, Xandr Senior Account Director, Mark Serhan offers his thoughts on the world of connected TV and what every buyer needs to know…

There is a seismic shift in the way audiences consume content and Connected TV (CTV) is a key driver of growth. More than 10 million Australians have viewed internet content on a TV screen and more than 6.8 million are viewing that content daily – a 43%* jump in the last two years. Smart TVs are leading the charge in Australia, with 76% using them to watch internet content.

The CTV growth is expected to see a substantial increase in brands looking to be a part of the action. Streaming video on demand (SVOD) is anticipated to grow revenue by 16% to $2.3 billion by 2024^, as Australians are spoilt for choice with streaming platforms. It has been predicted^ that subscription TV consumer revenue will outstrip free-to-air TV advertising revenue as consumers are increasingly willing to pay for personalised content bundles and experiences.

Clearly, As CTV and OTT viewership continues to grow, linear viewing will decline, making CTV and OTT an increasingly important investment channel for buyers. Broadcast video on demand (BVOD) is a key growth driver for free-to-air TV with a 27.5% increase in forecast advertising revenue in 2020^.

Xandr’s third annual Relevance Report found that advertisers around the globe cite ‘creating a better ad experience for consumers’ as a top challenge facing the industry today. This is driven by changing media consumption habits and consumer privacy concerns. So, in order to optimise campaigns as effectively as possible, brands need to pivot their strategies to consider such shifts in consumption and prepare for the convergence between digital and linear TV.

The advent of CTV has brought with it a raft of new terminology and nuances that buyers and marketers need to understand in order to make strategic and effective spending decisions.

Before we dive into the new terms, let’s think back to how we define CTV. A CTV is any type of television screen that can stream digital video. It does not require a TV set that comes out of the box with an internet jack, the so-called smart TV. Viewers can feed TV-over-the-web to their sets using streaming devices like Apple TV or a video game console.

Here’s what you need to know.

Consumption Models

Video on Demand (VOD) is an interactive TV technology that allows consumers to view

content as it is streamed in real time or download programs and view them later. Consumers can access various programs and content across several networks. When it comes to CTV, there are two key VOD formats to understand.

• SVOD: Subscription video on demand provides users with a premium, ad-free experience in exchange for a subscription fee, typically for unlimited consumption of included content. Examples include Stan, Foxtel’s Binge, Amazon Prime, Disney+, Netflix and Apple TV+.

• AVOD: Advertising supported video on demand offers either a free or reduced-price streaming model that includes ads. Under this model, advertising revenue is used to offset production and other hosting costs. Hulu is one provider that offers a reduced-price model inclusive of ads.

• BVOD: Broadcast video on demand offers high quality, long form content that is controlled, enabled, and consumed at the viewer’s discretion after or before it has or will be aired on broadcast television. Content is funded through the use of both pre-rolls and mid-rolls at pre-determined ad breaks which mimic the broadcast television experience.

• TVOD: Transactional Video on Demand allows consumers to purchase content on a pay-per-view basis. Examples include Apple’s iTunes and Amazon’s video store.

Features

In order to make the most of their spend, brands need to ensure their ads are not competing for consumers’ attention. At the same time, publishers need to ensure they’re not boring viewers with the same ads repeatedly. That’s why features like frequency capping and competitive separation are important.

• Frequency capping: As audiences grow for connected TV, the current blight of repetitive ads becomes a bigger problem. Technology such as Video Header Bidding can help digital video platforms keep tabs on frequency, and frequency capping can prevent ads from running after a predetermined umpteenth time.

• Competitive Separation: Competitive separation ensures that the categories and brands represented within a publisher’s ad pod do not conflict or compete with one another. For the end consumer, it reduces ad fatigue and allows brands messages to reach consumers in a more powerful way.

Identity & Targeting

Marketers and publishers need technology platforms that provide accurate identity and targeting solutions and therefore enable smart targeting and measurement across devices.

• IFA: The Identifier for Advertising provides device identification while giving end users the ability to limit the device/consumer information accessed by advertisers or apps. According to IAB Tech Lab, in addition to an IFA, ad and measurement platforms need to identify the source of the IFA, or the IFA Type. This could be device-generated (and therefore used across apps), publisher or SSP provided or a temporary/session IFA. Without this context, the usefulness of the IFA is limited.

• Deterministic vs. Probabilistic IDs: Deterministic IDs are based on subscriber data linked across authenticated services. The advantage of a deterministic match is that the customer identity is verified, whereas probabilistic graphs often have more scale but are largely modelled or based on previous behaviour and statistical analysis, which can lead to a lack of precision and accuracy.

• Behavioural Targeting: Buyers reach consumers based on their previous actions or interests, available through search history or other means, to match relevant users with their message.

• Video Content Metadata: Information describing the video content before, around or after an ad request including content duration (length), ratings information, delivery type (VOD or streaming), genre (comedy, sci-fi), and program type (movie, series, event).

• Unique App Identifier – Unique app identifiers provide advertisers with a standardised way to identify and understand what apps they are buying on. Historically this hasn’t been available to buyers buying video or CTV. These classifications are important from an ad targeting perspective, and they also support the contextual classification of inventory.

• Household vs. Device-based targeting: Similar to addressable TV, household targeting means ads reach consumers based on their household. So, two families can be watching the same show via CTV, but see different ads based on various identifiers. Device-based targeting means an advertiser can reach audiences based on the device they are using, whether it’s a CTV, mobile phone or desktop.

Cross-Screen Campaign Considerations

Cross-screen campaigns allow brands to reach the same audience across TV and digital in a single buy and receive meaningful analytics and insights to understand performance. Such campaigns are essential for buyers to reach key audiences at scale in a measurable way.

• Omnichannel Audience Reach: Advertisers can track audience engagement across digital devices. They can measure unique devices reached from their CTV cross device campaigns, and attribute online conversions, such as website visits or online purchases, to those campaigns.

• Cross device attribution: Attribute conversions – which can take place online, offline, via mobile apps or foot traffic – to your campaign, across all digital devices. Combine browsing, location and viewership data to reach audiences as they stream across devices, including CTV, mobile and desktop.

• Converged TV & Digital: As pay TV audiences shrink and media consumption fragments, buyers and sellers will converge TV and digital video advertising looking to platforms for the ability to plan, buy, and measure ads across formats and screens on aggregated inventory sources.

Sources:

*IAB Australia Nielsen Digital Enumeration Study May to July 2020 (YOY versus May to July 2019 quarter) ages 14+ n=3000 per quarter

^ PwC Australian Entertainment & Media Outlook 2020-2024