Decoding CTV Measurement

The following is republished with the permission of the Association of National Advertisers. Find this and similar articles on ANA Newsstand.

By Jessica Hogue

Connected TV (CTV) is increasingly becoming mainstream. It’s no secret that last year’s lockdowns ushered in a boom of home streaming that’s still going strong, and CTV grew with it. In fact, CTV is expected to reach four-fifths of U.S. households this year and CTV ad spend is expected to exceed $11 billion dollars. That number, eMarketer reports, is only expected to keep growing, with predictions that it will increase 61 percent by 2024.

Despite this huge growth, CTV is still a relatively new channel and many marketers struggle to understand how it works within the advertising landscape, especially when it comes to measurement. It can’t be measured the way linear TV is measured, and it cannot be measured in the same way as mobile or desktop devices currently. CTV represents a new territory that’s fragmented with multiple devices, a lack of common identifiers across different platforms, multiple measurement methods and offerings from both third-party providers and streaming platforms, and walled gardens that limit transparency. This fragmentation can make it difficult for marketers to achieve accurate measures of reach and frequency across consumers.

With that in mind, Innovid partnered with the ANA for a first-of-its-kind study to give marketers the answers and tools they need to decode CTV measurement. The study, called “Decoding CTV Measurement: An In-Depth Look at Reach, Frequency, and ROI,” was conducted between January and April 2021. It analyzed 35 campaigns across 20 of the largest advertisers, and it measured 1.7 billion impressions that totaled more than $35 million in media expenditure. Further, the study encompassed a range of campaign sizes and types, a mix of programmatic and direct campaigns, and a range of inventory partners — including more than 160 advertising-based video on demand (AVOD) services or publishers and more than 25 operating systems and device types.

Here are some key findings from the report:

The Depth of Unique Reach Has Yet to Be Unearthed

As advertisers are actively looking to replace impressions from traditional TV viewing, brand awareness and reach are often the focus at the outset of a CTV campaign. To maximize this opportunity, marketers need to address the question of how to build scale.

Across the 35 campaigns studied, the average CTV campaign reached only 13 percent of the available U.S. CTV households. To achieve reach goals, brands need to put more media weight (i.e., impressions) behind their campaigns to reach more viewers. The study found that upward of 100 million impressions should be allocated for broad awareness campaigns.

Duplication Should Be Managed, Not Avoided

CTV is fragmented and it remains a challenge for CTV advertisers. The conventional wisdom says this fragmentation leads to unwanted levels of duplication. However, the study found that most campaigns have low frequency overall and have a majority of partners that don’t overlap.

The true north for maximizing and building scale in CTV actually requires a strong mix of supplier diversity.

The study revealed an average publisher duplication rate of just 32 percent. Campaigns with substantial reach tend to use a larger number of inventory partners to achieve scale, often resulting in greater levels of overlap. However, they also tend to reach a much larger percentage of U.S. CTV households.

Marketers should strive to manage duplication, not avoid it altogether. They should combine inventory types to achieve scale and evaluate different combinations of media partners to identify patterns of duplication. Then they should monitor rates of duplication at the household level and optimize for future campaigns.

CTV’s Frequency Problem Is Highly Exaggerated

There’s a myth in the market that CTV has a frequency problem.

This implies that the market is relatively small and supply is driven by excessive frequency. However, the ANA/Innovid study found that average campaign frequency was surprisingly low over the life of the campaign — just 4.6 across all campaigns. Eighty-five percent of households were exposed to an ad between one and two times on average, while 14 percent of households were exposed between three and nine times. Just 1 percent of households were exposed more than 10 times on average.

A separate study, conducted in 2017 by Simulmedia, found that seeing an ad once made people 5.7 percent more likely to make a purchase and that conversion-rate lift increased between the first and fifth exposure. The takeaway is these numbers aren’t actually that much of a problem.

The Impact of CTV Spend Can Be Felt Far and Wide

A recent survey by Cadent of brand marketers found that nearly a third (32 percent) viewed cost as the key limitation to CTV advertising. But is it actually that expensive for what a brand gets?

The ANA/Innovid study discovered that CTV might actually be more moderately priced when one factors in its inherent benefits. The average eCPM of the campaigns studied was $23, which sits in between the average CPM for U.S. primetime TV ads for broadcast and cable ($36 and $19, respectively).

Given that CTV also enables enhanced first- and third-party audience targeting and granular reach and frequency measurement at the household level, there’s no doubt that every dollar spent on CTV works harder.

Programmatic Advertising Proves to Be More Efficient

Finally, with the growth in programmatic recently, the ANA/Innovid study examined the difference between programmatic and direct buying on CTV.

While direct-sold campaigns achieved more impressions and greater total reach with fewer publishers, programmatic campaigns had a lower average cost-per-unique-reach and a lower average campaign eCPM. They also saw a higher average unique reach efficiency. This underscores two of the key benefits of programmatic advertising: lower costs and greater efficiency.

CTV can become a true force in the omnichannel mix once marketers unlock its full potential. The recent joint study between Innovid and the ANA uncovered plenty of data points to guide marketers on how to further their investment in the biggest screen in the home.

About Author: Jessica Hogue is the general manager of measurement and analytics at Innovid, a partner in the ANA Thought Leadership Program.