How CTV is reshaping targeting and measurement — and growth — for marketers

For retail advertisers, this presents a significant opportunity. At the same time, given the recent changes sweeping across the digital advertising industry, digital retailers face an unusual combination of challenges over the coming months: IDFA is phasing out, cookies are going away, Facebook is more expensive than ever and Amazon’s ever-changing policies and economic structures pose uncertainties. Meanwhile, paid search is expensive and has limited potential in terms of scale.  

With all of these headwinds, CTV represents a scalable marketing channel with increasingly powerful and effective targeting and measurement capabilities similar to digital. There are seven fundamental ways to frame the channel’s growth.

From the cost of entry to targeting advances — CTV is evolving

First, when it comes to CTV viewing experiences, CTV is a subset of OTT, where the streaming content is delivered to actual TVs (“TV glass,” as the TV OEMs like to say).

With that in mind, here are the top seven reasons that CTV will be the growth channel of the future for retailers:

1. Massive scale. It’s no secret that the cord-cutter segment is increasing. Recent data from Samsung points to an astonishing statistic: 63% of all TV viewing time now happens on streaming services.
   
2. Digital-like targeting. In addition to advanced demographics and geo-targeting, CTV marketers can leverage first- and third-party data segments, including retargeting, intender segments and lookalike audiences. This is powerful because, unlike linear TV, CTV can target viewers in a very similar fashion to other digital channels. Data from websites and other digital channels can be used to target audiences on the glass — retargeting people who’ve visited websites with a CTV ad is now a reality.
   
3. Powerful form factor.  The TV is the most influential screen in the house, often with entire rooms built around it. TV viewers are in lean-back modality, often with smartphones within reach. This combination makes CTV audiences uniquely receptive to advertiser messaging. Just like linear TV, the ad is full screen and non-skippable, but unlike linear it isn’t typically sold in pods in which the marketing team is one of six brands competing for attention — CTV most often delivers the full attention of the viewer.
   
4. Radical innovation on creative. From menus to at-home schooling, a year of pandemic and quarantine prompted consumers to embrace QR codes. Recent innovations around integrating QR codes into CTV ad creatives have demonstrated some incredible results. Data from QR company Flowcode shows CTV scan rates are three times higher, driven by cord-cutters who are tech enthusiasts. In many instances, TV scan rates are higher than average CTRs in digital. Flowcode says that specific CTV codes can get high single-digit scan rates within the content. This kind of one-to-one direct consumer engagement with TV ads is potentially a game-changer for performance TV.
   
5. Digital-like measurement. With CTV advertising, marketers can measure the actual impact of CTV ads on a one-to-one basis, from CTV ad exposure to website traffic to sales to full ROAS. In other words, marketers can measure CTV ad results and ROI in the same way they do search and social — and this can be achieved without the use of cookies, IDFA, samples, panels and indexes.
   
6. Low cost of entry.  Most marketers believe they have to spend $50,000 to test TV, but platforms with advanced measurement capabilities are helping marketers achieve results with CTV ad budgets that are on par with testing search and social.
   
   Additionally, creative costs are no longer the barrier they once were. TV production platforms are now helping marketers produce entire packages of creatives for less than what a traditional TV ad production would cost, and in less time. This change enables marketers to develop and test multiple creatives in order to identify the most effective creative treatment for each audience segment in a data-driven way.
   
7. Bottom-up budget planning. One of the greatest points of friction for digital-first retailers entering the traditional TV market has been the legacy need for top-down reach-driven media planning solutions. This is because, unlike search and social, linear television is often planned using outdated metrics such as reach and share of voice. With CTV, all of this legacy thinking and language is not relevant. With the immediate feedback loop of one-to-one attribution and outcome-based goals, growth marketers can plan CTV with values like CAC, LTV, cost per visit, conversion rate and CPA — and they can adjust on the fly within days, not weeks, of launching their campaigns.

As the CTV conversation continues, the questions and needs will almost certainly evolve. But one thing is clear — CTV is a totally different platform than linear TV, and should be approached with a digital-first strategy and mindset, based on driving clear results enabled by new one-to-one measurement and attribution technologies built for the channel.  In other words, retailers can approach CTV like a digital channel instead of enduring the high-friction, high cost of entry and vague measurement around legacy linear TV.