3 Ways to Rethink CTV Targeting

February 3, 2021
Article

Connected TV (CTV) is more than an ad buying opportunity – it’s the future.

The stats speak for themselves. Time spent with CTV devices increased 81% year-over-year in 2020, according to Nielsen.

This acceleration was largely driven by the pandemic, but the broad behavior shift toward connected television and away from linear is here to stay. And ad buyers are embracing that change.

It’s clear why. CTV offers incremental reach, the ability to focus on relevant audiences, and the power to reallocate ad dollars on the fly based on real-time performance measurement.

The Trade Desk’s Future of TV report shows that nearly half (46%) of TV buyers say they plan to spend more on audience-first targeting strategies in 2021. At the same time, 59% of TV buyers – and 36% of CTV buyers – say they expect to make fewer upfront commitments.

Although traditional TV still commands the lion’s share of ad dollars – it’s a $70 billion market – CTV spend is set to hit $10.8 billion this year, up from almost $7 billion in 2019, per eMarketer. The majority of those ads, nearly 60%, will be bought programmatically.

The flywheel is already spinning. Here are three ways to stay smart, and rethink what it means to be audience-first as dollars flow into CTV.

Everyone can play

One of the most compelling aspects of connected television is that it’s an opportunity to democratize TV spending.

Traditional TV spots are expensive and often inaccessible to brands with smaller budgets or campaign managers looking to be more focused. Linear is pricey because advertisers are paying for national scale. CTV changes those dynamics..

Not only does audience relevance strip out the waste – it also means that advertisers can reach a particular household without having to blast ads all over their DMA – the ability to hit more refined demographic segments makes CTV way more cost effective.

Test your creative

Audience-based targeting in CTV can also help larger advertisers hone their linear TV strategy and drive performance.

Testing television copy is a laborious process. But digital advertisers have been efficiently testing multiple versions of their creative and getting real-time feedback on messaging for years.

Enter CTV.

Rather than betting big on a linear buy and measuring results after the fact, advertisers can test multiple creative assets on connected TV first and see which ads drive the desired actions with specific audiences.

There’s also the extra added benefit that any creative testing advertisers do on connected TV serves as a data-driven complement to whatever ads they later run on traditional television.

Incremental all day long

Although linear TV is still where most advertisers go for mass reach, there are some consumers that advertisers simply can’t touch through traditional television. Cords are getting cut daily across all generations of viewers, and there’s a new generation of viewers who never even bothered with a cord at all.

Ad-supported streaming is an increasingly effective driver of incremental reach to these otherwise unreachable audiences. Some streaming platforms are even starting to guarantee incremental reach to ad buyers as a sweetener to their upfront pitch.

Even though linear TV has been bought and sold on age and gender for decades, the desire was always to go deeper and be more precise in the audiences that matter Auto advertisers don’t want to reach “Top Gear” viewers, per se – they want to reach real auto intenders.

In connected TV environments, advertisers can do that for people who don’t do cable, and then they can also measure the outcomes.

Whether it’s more precise measurement, reaching audiences that matter, or innovating with a range of ads and ad formats, for the first time, CTV allows advertisers to be data-driven with their TV advertising campaigns. For more information on the future of TV, download our latest research report.