Debunking CTV Myths

What You Should Know

 


 

Transcript

 

Hello, I’m David McBee, Simpli.fi’s Director of Training. Welcome to The Simpli.fi Webinar Series. Join us on the second Monday of each month for industry news, interviews, product roll-outs and training on all things related to targeted advertising and connected TV.

And if you miss us live, you can visit Bullseye or simpli.fi/webinars for all of our previously recorded episodes.

It’s February 2022 and I’m going to use our time together this month to talk to you about some of the misconceptions that are associated with CTV and some of the things that make Simpli.fi’s CTV offerings so special.

Let’s start with one of the biggest myths that exists in this space, and that’s that CTV audiences are only “one thing.”

Let me explain what I mean. I’ve heard brands object to advertising on CTV because “it’s only for millennials” or “only the tech savvy watch CTV.” Or… get this, I’ve heard advertisers say, “Wealthy viewers only watch commercial free subscription CTV services like Disney+, Netflix, and HBOmax. Only the lower income demographic watches that ad supported CTV.”

I could bust this myth by sharing a couple of stories – like the fact that my 72-year-old mother who can barely work her iPhone only watches CTV. Or that even though I can afford to (and pretty much do) subscribe to nearly every paid CTV service that exists, I still find myself watching a lot of Ad-supported CTV too.

I could also point out that nearly every new TV is a smart TV and most of them require an internet connection the second you turn them on. And… it’s not like they’re expensive. Heck, you can get a 70-inch smart TV at Wal-Mart for about twelve dollars. Okay, I’m exaggerating. But not by much. this web search for “TV” on Walmart.com shows you that nearly all of their TV inventory is internet compatible and they are not very expensive. My point is, no matter a person’s age or income, their next TV purchase will probably be a connected TV.

And these things are plug and play. Once they’re connected to the household’s Wi-Fi – something even the non-techie person can likely accomplish, most of the CTV options are built right in. It’s as easy as clicking an app to get started watching free CTV programming. Heck, on apps like Pluto TV, you don’t even have to create an account or sign in. You just navigate to the app and start watching hundreds of free, live channels of television.

But these are just stories and examples and fictional scenarios. If your experience aligns more closely with the myth, then I’ve got to provide you something a little more concrete to persuade you that CTV viewers are not only “one thing.”

Let’s start with that first one, that CTV is for millennials, that because they are young and tech savvy, they are the ones consuming CTV. While it may be true that millennials make up a larger part of the CTV audience, that doesn’t mean that other generations are not also watching CTV.

According to MediaPost, “among U.S. CTV consumers, the median age is 45, and the audience is fairly evenly distributed across age segments.”

Meanwhile eMarketer’s Insider Intelligence article, “Connected TV usage expands across all generations” admits that young people are more likely to use CTV than older people, with more than 80% of those ages 25 to 54 watching CTV. But the article also says that four in 10 US senior citizens are CTV users too.

So it’s true that there are more young viewers than older viewers, but with 40% of seniors watching CTV, that means there are a lot of viewers that fall into that demographic.

I think I know what you may be thinking.

If you’re an advertiser, or an agency working with an advertiser who sells, say, hearing aids for example, or another product aimed at seniors, then your money would be better spent in other ways.

Why waste a large percentage of your ads on young people who aren’t in need of your product?

I get it. I really do. If we were talking about linear TV and I told you that a particular program was aimed at and had an audience of mostly millennials, you probably wouldn’t advertise on that show, right? And I would totally agree.

But CTV has an advantage that linear TV doesn’t.

Yes, just as you would with linear TV, CTV can target an audience based on content. Lots of advertisers are still doing this and it’s a perfectly fine strategy for CTV.

But consider the advantage that CTV has over linear TV – specifically, the ability to create and target an audience based on data. Or said another way, our advertiser who sells hearing aids can choose to target their ideal audience using any of the following parameters:

One, people who have visited their website. Yes, you heard me right. We can show an advertiser’s commercials on the CTV in a home where a laptop or phone in that home visited their website.

Two, People who have recently searched for or read content about hearing loss and/or hearing aids. This strategy would not only reach the seniors who are struggling with hearing loss, but also the children of those seniors who have been doing research on their parents’ behalf.

Three, people who visit websites that are categorically relevant to seniors – so maybe like websites about senior health or retirement.

Four, People who have visited specific locations like stores that sell hearing aids, or people who live in retirement communities.

Five, people on a list the advertiser may have. Perhaps they have a new model of hearing aids, they’d like to make past customers aware of. We can upload their crm list and then deliver CTV ads to the homes on that list.

And six, we even have the ability to curate a list of homes where there is the presence of a person who is of a certain age and to target the CTVs in that home.

So instead of assuming that everyone watching … say game shows, for example, are seniors, Simpli.fi can target these kinds of individuals and reach them no matter what they are watching.

The same goes for the argument about wealthy vs low income. if your advertiser’s product or service is expensive, and they prefer to reach an audience of a certain household income, Simpli.fi can easily target homes that fall within a certain income bracket.

If you want to target households where the income is six figures or greater, Simpli.fi can do that.

Consider this… IF the myth were accurate and these high-income folks really don’t watch Ad Supported CTV, any ad campaign targeting high income households would simply fail to deliver in full because there would be no one to show the ads to. And of thousands of Simpli.fi campaigns that target that very audience, that just isn’t happening. It’s rare, in fact, that we ever target an audience that is so specific that there aren’t enough people in any given demographic watching ad-supported CTV to deliver campaigns in full.

Could it happen? Sure. If your advertiser asks for too many variables to define their audience, it might be challenging to deliver a campaign in full. But generally speaking, it’s easy enough to target a “wealthy” audience on CTV and so we know they are, in fact, watching ad-supported CTV.

Bottom line – CTV audiences are NOT all “one thing.” Nearly every demographic is watching CTV to some extent. Sure, some more than others. But with Simpli.fi’s ability to target users based on behavior, location and demographic data, we can easily build just about any kind of target audience that an advertiser wants to reach.

Here’s our next myth: Private Marketplace Inventory is better than open exchange inventory.

Before I dive into this myth, let me start by saying that Simpli.fi is able to place ads on inventory of all kinds. We have thousands of private marketplace deals with publishers and about 50% of our CTV campaigns are currently run through these private marketplaces because the inventory where the ads are delivered is important to our advertisers.

So please don’t take what I’m about to say as some kind of argument against private marketplace inventory. If that’s important to you, if that’s what your advertiser wants, Simpli.fi can provide that.

The reason this myth is worth discussing is because of one word. BETTER. Private Marketplace Inventory is BETTER than open exchange inventory. It’s that one word, BETTER, that makes the myth untrue. And here’s why.

Define better. Is an ad on a private marketplace app (like Hulu, or Peacock) better than an ad on the open exchange? You might say, “well yah, of course it is. Private Marketplace apps like those are much more popular than apps that use the open exchange.” I concede the accuracy of that statement. But I still challenge the use of the word “better”. What makes it better?

Popularity of the content is technically irrelevant when you’re buying CTV, because you don’t buy ad slots like you do on linear. You purchase a set number of ad impressions. Here’s what I mean.

A single ad impression delivered on “the popular” private marketplace app is delivered to a single CTV device.

Meanwhile, a single ad impression on the open exchange is also delivered to a single CTV device.

You could say the same for 100,000 ads. Assuming a frequency delivery of 10 ads per device, 100,000 ads on the “popular” app would reach 10,000 CTVs. 100,000 ads on the open exchange would also reach 10,000 CTVs.

Or a million ads. And the ads on open exchange inventory like Pluto are normally a fraction of the price! So basically, advertising on the open exchange can actually mean more reach for less money.

The popularity of the app as it relates to reaching quantities of CTV viewers isn’t actually relevant when you’re purchasing a campaign based on number of impressions.

It’s clear where this paradigm comes from. It’s linear TV thinking to relate popularity with reach. On linear TV a single ad on a super popular show reaches a great deal more people than a TV commercial running in the middle of the night on an old rerun. So, this old paradigm of “popular is better than not-so-popular” comes from a real and authentic place.

But advertisers forget that their CTV campaign will be delivered to the exact same number of CTVs, no matter how popular or not-so-popular the content is.

So that leads us to the question – what is the value of an ad appearing on popular content rather than the not-so-popular channels and shows?

This is, of course, where the advertiser says, “I like the audience that’s watching the Tonight Show better than the audience watching old Star Trek reruns.”

Totally fair. Totally and completely fair – IF there was no such thing as audience targeting and you were just targeting anyone watching those shows. All things being equal, the tonight show probably has an audience that some advertisers would prefer.

But CTV audiences aren’t (or at least they don’t have to be) based on the programming. Here’s what I mean.

As I mentioned while debunking the last myth, Simpli.fi can create an audience of CTV viewers based on all kinds of criteria – including demographics.

As an example, let’s say we’re working with an advertiser who sells high end camping equipment. Maybe they’re running a behavioral campaign that reaches men and women of all ages and incomes that have shown an interest in the outdoors.

But for this particular campaign, they have a goal to reach a demographic of males between the ages of 35 and 55, whose estimated household income is greater than a hundred k, who have a gold or platinum credit card and they’ve shown through their purchase history that they have an interest in the great outdoors.

Once the audience is built and targeted, on what channels or shows should we deliver the ads?

You might say, “shows related to the outdoors, or travel, or survival shows.” But I say that’s linear tv thinking.

How about we target these men on whatever shows those men are watching?! Maybe this ideal demo likes old Star Trek episodes. Or maybe he likes programs that are totally unrelated to what one might assume of an outdoorsman – like maybe he has a thing for reality dating shows. Should we really try to guess what he’s watching? Or is it more important that we show this advertiser’s ads to the men who fit their demographic criteria?

And for the record, if you’re thinking to yourself, outdoorsmen don’t watch dating shows, think again. I fit this demographic and I watch a lot of old Star Trek and yes, as embarrassing as it may be to admit, I also watch my fair share of reality dating shows.

What would make any ad delivered via a private marketplace deal better than an ad delivered in the open exchange… if those to whom the ad is delivered fit the parameters of the ideal client that the advertiser is trying to reach using behavioral, location and demographic data like this?

Let’s use a traditional media example to further drive home this point. You’re working with an orthodontist who wants to get ads in front of the parents of young teens – the ideal age for braces. The orthodontist is considering placing an ad in the local neighborhood newsletter. It’s delivered to over 1000 homes, owned by some of the most prominent members of the community.

Meanwhile, a direct mail media rep offers her a list of 1000 addresses defined by the presence of children ages 8 to 13. Also, the parents are of an income bracket that can afford braces.

Which is “better?”

Honestly you could make a case for either scenario, right? The neighborhood newsletter sounds like it’s likely to reach a lot of the orthodontist’s target market. But this newsletter may also be delivered to couples without children, families whose children are still too young for braces, empty nesters and seniors – a lot of people the orthodontist has no chance of converting into patients.

Meanwhile the direct mail list is exactly her target market. Right age group. Right income. Exactly the right target audience.

There’s no right answer here. It truly depends on how you define better. If the goal is awareness and reach, the neighborhood newsletter may be fine. If the goal is performance, as in new patients, she might lean toward the direct mail campaign.

It’s all about the advertiser’s goals.

Of course, the only way to a hundred percent know for sure is to run both campaigns and measure the results.

This is why it’s so valuable that Simpli.fi delivers about half of our campaigns across private marketplace deals and half in the open exchange. It gives us perspective and historical data that allows us to build campaigns either way, truly providing advertisers with what is better for their goals.

So I’m busting this myth. Private Marketplace inventory is NOT NECESSARILY better than open exchange inventory. It all comes down to the advertiser’s goals.

Our next CTV myth is this – that CTV is expensive.

There are a couple of ways to bust this myth.

Let’s start with some simple math that may help you better understand the value of CTV.

Imagine a $10,000 CTV advertising campaign using a CPM of $30. (I’m using $30 because it’s a good average, but it could be higher or lower depending on the use of audience data and the CTV delivery inventory.)

First, we need to determine approximately how many impressions that equates to.

We’ll take $10,000 and divide it by $30. We get 333. (Technically, it’s 333 point 3, but we’re going to round that for easier math.)

We multiply the 333 by 1000 because CPM is cost per THOUSAND impressions. That gives us 333,000 impressions, or actual ads.

Next, let’s consider frequency to determine how many devices we’re likely to reach.

For the sake of our example, we’ll say that the campaign is delivering about 10 ads per device.

333,000 total impressions divided by 10 ads per device reaches about 33,300 devices.

Now that we have a rough estimate of how many devices the campaign is reaching, let’s try to determine how many homes the ads reach.

According to Leichtman Research Group, “Over 80% of TV households in the U.S. now have at least one connected TV device, with a mean of 4.1 devices per connected TV household.”

Based on that, we’re looking at our campaign reaching approximately 8,325 homes. (33,300 ÷ 4 = 8,325)

So, if our $10,000 campaign is delivering to 8,325 homes, the cost of reaching each home is approximately $1.20. Keep in mind, that’s 10 ads per CTV to an average of 4 CTVs per home. That’s 40 CTV commercials per house for $1.20. That doesn’t sound terribly expensive when you break it down like that does it?

I need to point out that this equation isn’t exact or consistent across all campaigns. These numbers are looking more holistically at a recent average of unique impressions delivered by device on our platform.

This number can fluctuate with your targeting setup in terms of frequency capping, bidding strategy (i.e., CPM being competitive), and the size of your target audience.

The second way to debunk this myth is to talk about the word “expensive.” Isn’t it fair to say that the $10,000 CTV campaign I just described is only expensive… if it doesn’t provide a profitable return on ad spend?

If the advertiser were selling, say, swimming pools, and their average profit per pool was $5000, then it doesn’t actually matter how many homes or devices the campaign is delivering to, as long as the results of the advertising campaign are the sale of more than 2 new pools. I say more than 2 because the goal of advertising isn’t to break even, but rather to make more than the campaign investment. Honestly, a campaign like this, targeting a relevant audience could easily sell a lot more than 3 pools.

As any media consultant will (or should) tell their advertiser, “Advertising is only expensive if it doesn’t work.”

With that, I’m officially debunking this myth.

Although I don’t think we can proceed without mentioning that getting everyone to agree on the definition of “a campaign working” is where it can get messy. If the advertiser’s goal is awareness, then $1.20 per house sounds like a pretty good deal? If the advertiser’s goal is ROAS, then how many sales need to come from the campaign, and how do we track those sales?

And that, my friends, is a perfect segue to myth number four:

CTV tracking and measurement is too complicated.

To debunk this myth, let’s be transparent about what can’t be tracked on CTV, starting with clicks.

CTR, or click through rate, should not be the goal of a CTV campaign as it isn’t something you should expect to see much, if any, of with your CTV campaigns since the content is mostly non-clickable.

This can be frustrating for the digital advertiser who is used to measuring CTR, but the good news is that there is a metric that is similar to CTR that I’ll share with you here momentarily. Hold that thought.

Continuing to be transparent, it can also be challenging to provide show-level reporting, as one might be used to with linear TV. This metric may come along at some point, but for now, app level reporting is what most exchanges provide back to CTV advertisers. That means that even if an ad is delivered on popular channels like CBS, NBC, Comedy Central, the History Channel, Fox Sports, Nickelodeon or CNN, the report may only show that they were delivered on Pluto TV. (This is a very real example as every channel I just mentioned is available on Pluto TV.)

As I’ve mentioned, if the advertiser is dead set on appearing on specific content, Simpli.fi can set that up using DEAL IDs. However, despite being able to deliver the ads on the requested content, the publisher doesn’t always provide reporting on this feature.

This lack of show-level reporting can be frustrating to the linear TV buyer who is used to knowing exactly what shows their ads appear on.

But do you know what a linear TV campaign can’t report? How many ads were actually delivered?

Meanwhile CTV reporting shows how many actual ads were delivered and their video completion rates – which are regularly in the 95% range!

When a linear TV ad airs on a popular daytime show, advertisers assume it will reach thousands of homes in the targeted metro. But how many of those homes actually have their TVs on and tuned in to the show when their commercial airs? There’s no real way of knowing . . . yet. CTV’s ability to actually measure ad delivery is forcing the linear TV industry to come up with better ways of measuring delivery – something we’ll likely discuss in a future webinar.

But currently, most linear TV advertisers lean on Nielsen’s data which uses a technique called statistical sampling to rate the shows. Nielsen creates a “sample audience” and then counts how many in that audience view each program, making note of their age and gender. Nielsen then extrapolates from the sample and estimates the number of viewers in the entire population watching the show.

There are 121 million TV households in the U.S., and Nielsen provides estimates for viewership based on a panel of around 20,000 households that report their viewing patterns on a daily basis. (Source: https://entertainment.howstuffworks.com/question433.htm)

That’s 0.016% of the TV viewing population, or about one and a half people per 1000. That’s the metric by which delivery has been judged for years and years. And now that CTV can literally measure how many ads are delivered, this way of measurement across the linear TV industry has become a hot topic of sorts in terms of assessing the impact ads have on their TV audience.

Linear TV advertisers who are expanding their campaigns to include CTV are discovering what digital advertisers have known for years – that CTV campaigns report real metrics that can help them truly measure the value of their investment.

CTV can report:

How many ads are delivered

What apps/channels where the ads are delivered

The video completion rate of the ads – again, normally in the 95% range. Because CTV ads can’t be skipped, you might think this should be 100% but alas, you can change the channel or even turn your TV off in the middle of a commercial.

But those metrics are just about ad delivery. Digital buyers learned a long time ago that when ads are delivered over the internet, as CTV ads are, they can also measure their performance!

As I mentioned a minute ago, you can’t click a CTV ad. So how do you measure its performance, you ask?

We use cross-device technology to see what other internet-connected devices are in the same household as the CTV, and we track the activities of those devices – specifically, if any of those devices visit our advertiser’s website or if the smartphones associated with that household visit our advertiser’s stores.

You heard me right. using our cross-device graph and a little code on the advertiser’s website, we can report when a device in the same household as the CTV where we delivered the ad, visits the advertiser’s website.

We can even use that cross-device graph with a geo-fence conversion zone drawn around the advertiser’s store, to report when an individual within the house where a CTV ad was served visits the advertiser.

In fact, I’d like to point out that Simpli.fi’s ad delivery and performance reporting are both at the device-level tied to users within households we’ve identified are worth targeting based on our set criteria. It isn’t a sample of ad delivery. It isn’t a sample of website visitors. and it isn’t a sample of store visits, but rather true user-level reporting using device graphing technology.

So now we have true performance reporting – not just delivery, but what happened, what actions users took, after being delivered the ads.

Is that complicated? not so much.

Here’s how many ads we served. Here are the apps on which we delivered them. They were watched at a 95%-ish rate, and… This is how many people to whom we served the ads went to your website and/or your store.

What do you think now? Is CTV tracking and measurement too complicated?

I think not. Myth busted.

Let’s recap.

One: CTV audiences are made up of nearly every age group, every demographic, every income level and every (you name it), and that Simpli.fi can help you reach an audience whose attributes are right for your advertiser.

Two, Simpli.fi can deliver on all kinds of CTV content and that “better” doesn’t mean the same thing to everyone. “Better” inventory should be defined by the advertiser’s goals.

Three, CTV isn’t expensive – as long as it works. Defining what works is the key to debunking this myth. For some advertisers, CTV works when it reaches a lot of homes with very little targeting or inventory concerns. For another advertiser, works might mean reaching a very specific target audience and/or driving web traffic or foot traffic to their stores. Either way, Simpli.fi can accommodate.

And finally, with its ability to report ads served, video completion rates, as well as website and foot-traffic conversion, I hope I showed you that CTV tracking and measurement not, in fact, all that complicated.

Thanks for joining me today. If you have questions about Simpli.fi’s CTV offerings, please reach out to your Simpli.fi account manager or send an email to hi@simpli.fi.

If you have questions about training, please send them to training@simpli.fi.

A copy of this webinar recording, along with the deck and a complete transcript will be available in Bullseye, as well as on Simpli.fi’s website at simpli.fi/webinars.

Please join us on the second Monday of each month for The Simpli.fi Webinar Series. I’m David McBee and I’ll see ya next time. Be Awesome.

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