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Does CTV ‘drama’ help advertisers drive performance?

February 4, 2021
Blog

Philo isn’t like other vMVPDs, which is just a fancy way of saying companies that deliver a cable TV experience through the internet (think Hulu, Fubo TV). It was first launched in 2009 by a pair of Harvard University alums. It’s CEO, Andrew McCollum, has been with Philo from the beginning. Those familiar with Facebook lore will recognize his name as one of the company’s original founders. McCollum even lived with Mark Zuckerberg during his college years and was also portrayed in the movie, “The Social Network,” albeit ever so briefly.

In an interview with The Current, McCollum spoke about how Philo thinks differently about CTV. “There is this massive sea change of how television advertising went from one size fits all to an audience first model,” he says. “All the things that digital has done for years are coming to TV advertising, but the change is happening slowly.”

The company is now offering insights — called “content signals” — through a partnership with The Trade Desk. The content signals are informing marketers whether their CTV ads appear alongside genres such as drama, comedy or reality shows, and how those ads perform. The signals also include the length of the content and whether video is being streamed live or watched on demand.

One major advertiser, which asked not to be named for this story, tested the content signals in a campaign to capture more subscribers. The advertiser saw its conversion rate more than double when advertising on drama-related content instead of shows about comedy, true crime or reality. Drama was also found to have the lowest cost per action (CPA) at 40 percent below the indexed average for this particular advertiser.

Even overlooked CTV signals, such as the length of the content, can bolster performance: In its test with The Trade Desk and Philo, the brand found that advertising in shows running between 80 minutes to 100 minutes (movie length) increased conversions to 3.4 percent, up from 2.5 percent when compared to 30-minute episodes. Importantly, there was no difference in CPMs, as content length does not impact price.

These new insights enable advertisers to understand performance in real-time and pivot toward content that works. It's worth noting, of course, that a successful matchup between premium content and brand may be different for each brand. Thus, a coffee brand might find success running their ads alongside the true crime genre instead of a sitcom. And what’s more it could change over time.

Reed Barker, head of advertising at Philo, says that while the content signals were available last year, they weren’t necessarily on everyone’s radar. That’s changed in 2021, as the signals are becoming a regular request among marketers. “Advertisers are using the content signals for setting up campaigns, brand safety as well as targeting,” says Barker.

He adds that advertisers often first start looking at how their ads are performing against different genres. “You can then start laying in information from your device graph or geography to get even more insights,” he says. “You start learning what’s really moving the needle by just layering in all of these different attributes to understand what is driving conversion.”

‘Tackling the big piece of the pie’

Content signals are a breath of fresh air for media buyers.

“For an advertiser specifically, if I could get those content signals in the bid request then I’d be able to make decisions for clients that aren’t just based on a one-to-one audience,” says Cassandra Bodykto, senior director at OMD. “I can now also link it to the content my audience is most interested in and speak to them while it’s relevant.”

The new content signals also amplify measurement. Marketers have already solved tying back ad spend to performance in channels such as mobile and display. “Now we are trying to tackle the big piece of the pie,” says Bodykto. “Which is linear and advanced TV. And then quantifying how those ad dollars tie back to sales.”

Even creative would get a boost. “If the data shows a brand’s ads perform best when shown during genres such as horror, it may lead the brand to discover a new understanding of how certain customers relate to their brand,” says Tomas Rodriguez, director of TV at The Trade Desk. Rodriguez emphasized that the new content signals also allow brands to “go much deeper and optimize toward driving better performance.”

Other content signals, such as whether the content is being streamed live or watched on demand, allow marketers to better understand the consumer mindset. “It would make it similar to making digital buys on the open web,” says Prerna Talreja, group director at agency Crossmedia. “We want to understand which categories improve performance to make future decisions.”

Philo says it now has more than 800,000 paying subscribers, a 300 percent upswing year-over-year. The company does not offer sports and its channel lineup includes popular channels such as HGTV, Food Network, A&E and AMC, among others. And for those wondering, the company got its name after Philo Farnsworth, inventor of the television.