Five Minutes With: Tim Sims of The Trade Desk on the Future of TV

January 27, 2021
Blog

The way we watch television — or at least the way we receive it — is changing at a faster clip than ever. Consumers have been cutting the cord in record numbers and across all age demographics. This trend is only accelerating into 2021. In this fast-evolving digital environment, what does this mean for marketers who want to optimize their audience reach with powerful ad campaigns?

In our ongoing series, Five Minutes With, we sit down with The Trade Desk’s chief revenue officer, Tim Sims, to get his insights into how we can prepare for the future of television.

If 2020 saw several years of disruption and innovation condensed into a few months, as we’ve found, what can we expect from CTV in 2021?

We're going to continue to see acceleration into that mode of consumption. If you look just across the streaming landscape, every major media company is aligning themselves for a future that is streamed. We're living in this age of some of the best content we've ever seen. And that content is available in more places than it's ever been. That creates quite a few reasons for consumers to adopt CTV.

According to our research, 27 percent of households say they're going to cut the cord this year. That's a massive increase from last year (15 percent). At the same time, we’re seeing agencies holding onto linear in their media mix. Is there a gap between what consumers are watching and where advertisers are spending their ad dollars?

There's absolutely a consumption relative to advertising dollar gap that is present in connected TV. What that means is we really need to reevaluate the process by which brands and agencies allocate TV and video budget across the changing landscape.

What should marketers be thinking?

The central question everyone should be asking themselves going into 2021 is ‘does my TV and video investment accurately reflect where my consumers are consuming TV content today?’ And if you're still spending 98 percent of your budget on linear TV then the answer is probably ‘no.’

Marketers still value linear TV, but they're spending more each year on CTV. What role would you say each plays in an advertiser’s media mix?

TV is just evolving. You can take advantage of that same sight, sound, motion and emotional connection to the consumer that you can get through a [linear] TV ad, but now you can link it to performance, to results, to in-store sales, to offline sales and online sales with CTV. All of those things supercharge connected TV from an attribution perspective.

Is linear going away any time soon?

No. The two are highly complementary. We are going to be living in a linear and CTV world for many years to come, where they will coexist and be complementary to each other.

Where do you see the upfronts in five years?

They will change, and they will begin to change this year because the commercial construct of those relationships must evolve with the consumption patterns that are happening. The basic idea of a large global advertiser sitting down with a large global content owner to discuss their advertising relationship on an annual basis will continue to exist, whether we call it the upfront or something else. But it will be a completely different conversation five years from now.

One of the top reasons for people to keep cable was always listed as live sports and programming. And last year, of course, when all that came to a grinding halt it was one more reason to cut the cord. At the same time people can now watch live sports on CTV. What are the implications for linear and how live sports will be consumed in the future?

Live events — whether it's the Oscars, the Olympics or the Superbowl — will always capture the attention and excitement of people. However, the way that they will consume them in the future will change.

Give me an example.

I might stream the Sunday football game or the World Series instead of watching on linear. All of that creates the same kind of fragmentation that marketers face today across entertainment-based content. But the power of the live event will remain the same as far as capturing attention; the consumption and distribution of that content will change and be different over time.

Let’s shift gears. How will the growth of CTV impact the way creative rolls out?

The idea that you make a single advertisement for the entirety of the United States is gone. At this point, you have so much more opportunity as a marketer to customize your message to different audience segments, to customize your message to different types of people. The degree to which you can customize creative to speak to a specific audience will then improve your ability to retain or start a relationship with that consumer.

Will we get to a point where an ad for CTV will match that of the linear?

Without a doubt.

Why is that?

Because we’re already there. I would argue that the ad and the opportunity from a marketer's perspective, on the exact same piece of content, is more valuable to them in connected TV than it is in linear TV. And the reason is that the ad they served in a connected TV environment can be targeted specifically to an audience that they would like to talk to, with a customized creative, and then tied in directly to real-time attribution and measurement metrics. That level of granularity isn’t available on linear TV.

Last question: What do advertisers need from a cultural or a skills perspective to get ready for CTV?

The linear TV ecosystem has existed and been bought and sold for decades across two relatively simple dimensions which are age and gender. Now, the possibilities are endless with what a marketer can accomplish in connected TV. They can on board first-party data about their customers and point that at the TV screen for the first time in the history of advertising; they can connect it to online and offline sales for the first time in the history of advertising; they can manage frequency more holistically and reduce waste from frequency for the first time in the history of advertising. We've broken free now from this paradigm of age and gender. That's a wonderful thing for marketers moving forward.