Why are Connected TV Ad Costs Racing Higher?
This question is one I am asked often by CTV buyers. The short answer, without getting into the shift from linear or the shift from digital back to TV (or CTV), is that we have a scarcity issue on the most sought out CTV programmers. Wait, with all the COVID viewers, and all of the talk around the tremendous growth in CTV viewing, you really expect me to believe that there is scarcity? Didn't we just see a massive increase in CTV viewing and supply?
Yes, many viewers chose OTT content and CTV viewing as their content and distribution type. Nielsen suggests 24% of TV viewing is on streamed content and programming. We forget that a large portion of viewing is happening in non-ad supported platforms like HBO Max, Netflix, Disney+, or on others with slim ad-free or ad-light packages like Hulu and YouTube Live.
The result is that spend earmarked for lost linear viewing is facing a streaming supply and demand challenge.
While we wait for HBO Max, Disney+ and Peacock inventory to hit the market (that will bring a load of inventory), get active in CTV. Next, eliminate the waste of linear. Optimize spend to eyeballs that are relevant for your brand and stop "empty calorie" GRPs on TV.
It is no longer uncommon to see 40% of programmatic CTV buys to be fraudulent. If you want some extra protection, an argument put forward at selected agencies and intermediaries is to avoid direct buying from Roku. As outlined in published reports Roku has been an outlet for identified fraud schemes. The most important thing to know is that buying direct or buying a premium app does not stop fraud!! New fraud schemes are being uncovered regularly with the latest just this month.
As far as rates go, CTV rates may never normalize to the same levels as linear, and they probably shouldn't since you have no waste and full addressability, but the time is now to be active in this growing space.
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The opinions expressed here are the author's views and do not necessarily represent the views of MediaVillage.com/MyersBizNet.
Gabe Greenberg
Greenberg, a 25+ year media and marketing veteran with tenure at Microsoft, Autobytel, Delivery Agent and Vibrant, is CEO of Octillion, a platform as a service company serving local and mid-market brands and agencies and of GABBCON (aka Los Angeles TV and In…
