To state the obvious, the connected TV (CTV) has changed advertising forever. Advertisers now, like never before, have an enhanced ability to target viewers on the television screen, and often through their preferred ad buying routes (managed service or programmatic). While CTV often refers to full-screen video formats that exist within app environments, advertisers are now leaning into the ability to deliver campaigns across CTV-native home screen experiences. Historically, these homepage ads have been reserved for entertainment brands and used to drive content promotion and linear TV. With the increased competition from advertisers for this coveted home screen space, a number of questions are raised that the advertising community must address – and find alignment on – if we want to realise the true potential of CTV advertising.
Digital or Linear?
One of the most well-known challenges is that CTV advertising does not neatly sit within a digital or linear buying media team. CTV budgets often feel as though they are in a bit of a grey area, coming from different teams based on the where the ad inventory sits within the CTV ecosystem. Put another way, if inventory appears within a broadcaster video on demand (BVOD) app, the budget is likely coming from a linear team that also buys media from the same linear broadcast channel. Alternatively, if CTV video inventory sits within a FAST app or a native ad unit on the homepage, this budget often comes from a digital media buying team.
The real issue here is that performance is judged differently based on where the budgets derive. Linear TV represents one of the largest areas of media spend and is aimed at getting reach and frequency across a target demographic, mainly to drive branding and awareness. Digital offers the dream of branding, but the buying KPIs are predominantly measured against attribution metrics like click-through rates/video completion rates/and cost per acquisition (CPA).
Diving deeper into the nuances of CTV, there is not an industry standard to track off-screen attribution, because CTV is a cookie-free environment. This can create a challenge to prove the efficiency of a CTV media buy if budgets are allocated from a digital team with performance KPIs; and I’ve heard this used as an excuse why some brands and agencies tepidly invest in the CTV space.
However, that same brand might have a massive linear TV budget designed to drive unique reach coming from another linear team. Why do digitally bought CTV ads not get the same measurement treatment as those bought for linear TV? This thinking shortchanges the full potential of CTV and also identifies a growth opportunity once an industry-wide solution is found.
Broadcasters’ impact on CTV in Europe
This points to some of the things we see in the European market that we don’t see in places like the U.S., for example. In Europe, many countries have public broadcasters that require viewers to purchase an annual licence. This is the model under which the BBC operates in the UK: anyone with a TV has, for decades, paid the annual fee (currently £169,50). This is the original SVOD model!
Roughly two-thirds of European countries have similar TV licencing programs that provide funding for their public broadcasters, though costs to the consumer vary widely. Some public broadcasters supplement their funding with advertising sales while others do not. It’s a patchwork of different approaches.
Across Europe, we are also seeing different approaches to how legacy broadcasters enter the CTV space than we see in huge TV markets like the U.S. In the UK, broadcasters have established a foothold with the aforementioned BVOD app. Traditional UK broadcasters like ITV, Channel 4, Channel 5 and several others have apps available to viewers so they can watch ad-supported online content at no additional cost, just as they always did in the pre-internet era, including live streams for news broadcasts and sporting events.
All of the major local channels in the UK have their own stand-alone apps and at the moment, these apps are the main drivers of any forecasted CTV spend in the UK. Again, this frequently has the effect of taking money away from linear buying teams while applying linear standards of performance.
Premium Formats on the CTV Home Screen
The video ads that run during these BVOD streams will look and feel exactly like legacy broadcast ads did, where they appear during pre-designed breaks in the programming. However, the CTV opens opportunities for the broadcasters to offer ad space in other ways too, such as display ads on their homepage. This is unfamiliar territory for most broadcasters so adoption of these new opportunities has been slower to roll out, but they are beginning to gain traction.
With CTV advertising on the home screen, smart TV OS’s have started to become the entry point for a consumer’s viewing experience on their TV. Across the pond in the U.S., we are seeing non-entertainment brands lean into this experience. Take for example the recently launched campaign from Toyota and VIZIO called “Choose Your Vibe,” which promotes the all-new 2025 Camry, where the VIZIO Home Screen team developed just the right experience for both Toyota and VIZIO viewers alike. This is the kind of advertising that can begin to drive additional value for both brands and consumers, as the ads give the consumer an opportunity to interact with the brand in a meaningful way. But the question remains: if this budget comes from a digital team, how will they measure performance? Purely on CTR or a brand lift study?
While targeting for CTV has been growing, the still-elusive holy grail of TV for advertisers is being ability to connect consumer behaviour back to their ads. Does an advertiser know that a specific sale happened or was directly influenced by an ad that consumer saw? At best, they could make educated guesses, based on models of sales that happened in specific geographic areas or timeframes. But this too is beginning to change.
Technology is advancing to the point where an advertiser one day may be able to know exactly whether a customer saw a specific ad, and if that same customer later bought the thing being advertised. There are lots of details that still need to be worked out, but the CTV ecosystem is part of what could make such a world possible once the silos of media buying KPIs are brought down.
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