CTV Has Room For Improvement in Ad Pods

Mike Baker, investor and strategic advisor

Differences in the way CTV and linear TV manage commercial breaks are driving a need for technical standards for advertising that will improve the consumer experience. The engineering of CTV apps and stream encoding are among the factors that need to be harmonized to avoid repeating ads in pods.

YouTube Drives Significant Share of CTV Viewership

Mike Fisher, vice president of advanced TV and audio at Essence

YouTube, the video-sharing platform owned by Google, is emerging as a viable alternative to other streamed programming as more households hook up their TVs to the internet. That growth has led advertisers to look for a combination of premium content and audiences within YouTube.

More Brands See CTV Opportunities on YouTube

David George, CEO of Pixability

The pandemic led people to spend more time at home while driving a significant shift in viewing habits. As YouTube’s viewership has grown, more brands are adopting the video-sharing platform as a bigger part of their strategies to reach consumers.

CTV Ads Help to Drive Purchase Intent

Grace Smith, senior digital marketing manager at Saucony

Saucony, the sportswear brand owned by Wolverine World Wide, reached new audiences with a CTV campaign that helped to drive higher purchase intent. About two-thirds (65%) of consumers who bought Saucony’s products after seeing its ads on Amazon Fire were first-time customers.

CTV Success on YouTube Takes Know-How

Tony Weisman, advisor and board member; former CMO of Dunkin’

“It’s no longer a question about whether or not you’re going to invest in YouTube,” Weisman said, “but are you going to do it smartly, or are you going to do it with somebody who can really make sure that that investment is wise? Or are you just going to take your chances? And I would not advise anyone to just take their chances.”

Brand Suitability More Nuanced Than Safety on YouTube

Matt Duffy, CMO of Pixability

While YouTube is mostly a brand-safe platform, advertisers still need to consider whether its content is also suitable for their campaigns. Pixability found in a survey that many advertisers rely on third-party vendors to help understand brand suitability.

Consumer Intent Emerges as Key CTV Audience Signal

Rob Norman, advisory board member for Pixability

“We’ve become familiar with the Amazon walled gardens and the Facebook walled gardens, but we’re about to become familiar with device-led walled gardens, operated by people like LG, Samsung, and Vizio,” Norman said. “The use of identifiers in the TV market is evolving at really quite a space. What I’m hoping people are going to do is to stand back and look at other forms of signal other than identifiers.”

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.

Brand safety concerns once plagued digital display and online video inventory. They have been somewhat soothed by brand safety software.

But, as conected TV rises, some of the same concerns are arriving on TV now.

CTV hits prime-time

In this video interview with Beet.TV, Matt Duffy of Pixability, a vendor of brand safety tooling for YouTube and other platforms, describes how the category is evolving.

Duffy points to a study from Global Alliance for Responsible Media and data from Comscore showing how comfortable advertisers have become with those channels.

“It showed (that) YouTube is now over 99% brand-safe for advertisers,” he says. “According to Comscore, over 40% of CTV watch time is YouTube.”

And Pixability just commissioned its own survey of ad buyer attitudes to brand safety in connected TV.

Duffy summarized some of the results.

Buyers look beyond

“(Respondents) don’t see CTV as a brand suitability threat or safety threat … Their concern is reach and driving full-funnel results on CTV,” he explains.

But Duffy says it’s not that simple – “safety” may be built-in, but “suitability” of content is a different matter.

“CTV content sometimes may have nudity or violence and so forth,” he says. “And it may also express certain opinions that a brand may not want to be aligned with.

“Although YouTube is safe, there are specific suitability issues that some of your advertisers may have with.”

From threat to opportunity

Pixability’s clients include the “big six agencies” plus smaller independents and some brands as well,

Duffy says the same kind of vendors that offer “brand safety” technology can also help out with “suitability”, the alignment of ads to inventory in an expanding CTV universe. “No-one wants one and not the other,” he says.

In fact, Duffy thinks the ‘brand safety” threat has reached the point of becoming an opportunity.

“Suitability has always been a little bit about defence and avoiding content you don’t want,” he says. “(But) it can be also thought of as an offensive measure – go on the offence and find content that performs well.

“We’re seeing a great trend towards agencies and brands embracing that and saying, ‘Yes, it’s not as much about avoiding content as it is about finding content that helps us perform better’.

Defense to offense

Companies like Pixability aim to turn video content into metadata signals, surfaced in buying platforms, that ad buyers can leverage or swerve. They are enabling the new wave of “contextual” video ad targeting.

Previously, Pixability released a tool for automating analyses of what specific video iterations are working or not. The system uses machine learning to evaluate the different versions of the uploaded ads while measuring their performance, context and audience against the client’s KPIs.

“We’ve created curated lists around different causes that people want to support or types of creators that people want to support,” Duffy adds. “We have LGBTQ creator lists, we have black and Asian creator lists, et cetera.

“So it’s a really nice trend to see suitability, not just as a preventative measure, but as a way to connect with creators that you want to support.”

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.

So why aren’t advertisers taking it more seriously when it comes to developing a connected TV advertising plan?

In this video interview with Beet.TV, media agency Essence’s Mike Fisher explains the value of YouTube.

Shifting viewing

“Within the last couple of years, we found YouTube really becoming one of the largest sources of ad-supported streaming happening on the TV screen,” Fisher observes.

“Historically, a lot of marketers did not look towards YouTube as that true TV replacement. People are still going to watch Saturday Night Live content – they’re just watching it in a way that fits their viewing habits; that includes now going to YouTube the next day, watching three or four Saturday Night Live clips.

“A lot of people are at home during the pandemic and that younger viewership who grew up on YouTube is starting to age out of living at home and going out on their own.

“We’re really starting to see a rise in YouTube as a viable alternative to other streaming happening on that TV screen, which has really led to a rise of the need to find a combination of premium television content, coupled with premium television audiences inside of that YouTube environment, and really make a case to our clients on why they need to consider that television.”

YouTube’s growth

Nielsen Streaming Meter says, of the 25% of TV time spent with streaming video, 20% goes to YouTube, making it the second-most-watched digital video platform after Netflix.

Accordingly, YouTube’s CTV ad revenue is growing fast, according to forecasts.

In Q1, YouTube brought in $6 billion in ad revenue for the period, up 49% year-on-year, putting YouTube on course to beat Netflix in annual earnings.

In March, YouTube’s chief product officer reported:

“Our fastest growing viewing experience is on the TV screen. Last December, over 120 million people in the U.S. streamed YouTube or YouTube TV on their TV screens.

And there’s another interesting viewing behavior emerging. A new generation of viewers chooses to watch YouTube primarily on the TV screen: Also in December, over a quarter of logged-in YouTube CTV viewers in the U.S. watched content almost exclusively on the TV screen.”

Context for safety

But Essence’s Fisher wants to ensure connected TV providers like YouTube can offer ad buyers adequate control over ad placement.

“We want to make that ad messaging doesn’t collide,” he says. “If you have humorous ad messaging, we want to certainly make sure that it’s not paired with anything that’s not brand safe or not on target.

“You don’t want to come out of something very serious with a very funny message. It impacts both the content and the ad message in those cases.

“So we’re really starting to think more about how we can use contextual signals, how we can couple audience plus context to really tell a better story.”

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.

For Saucony, the sportswear brand owned by Wolverine World Wide, CTV was compelling because of its popularity among younger consumers with active lifestyles.

“We saw that with our target audience, they definitely were there already,” Grace Smith, manager of digital marketing at Saucony, said in this interview with Beet.TV. “They were consuming digital video, whether that be smaller digital video clips or longer-form content like shows and movies.”

Saucony also ran social media and social video campaigns aiming for consumers in the lower part of the purchase funnel, but was disappointed to see that social media users tended to skip past video ads.

“The struggle we saw with social video is that our average view time was only three seconds,” Smith said.

More Complete Brand Story

The advantage with CTV was in reaching upper-funnel consumers with 15- and 30-second spots, which were in more compact commercial breaks that viewers knew to expect before watching shows. The longer viewing time gave Saucony a chance to tell a more complete brand story.

Saucony worked with digital marketing agency iProspect to develop its strategy, and with video ad-tech startup Pixability to refine its targeting on CTV platforms such as YouTube, Roku and Amazon Fire.

“Pixability was just above and beyond. Their targeting capabilities, the addition of brand studies to get more data beyond click-through rates [and] completion rates,” Smith said. “They had access to a ton of additional studies and data beyond the front-end media, which was really important to us, too.”

As viewers spent more time consuming media on CTV platforms while stuck at home during the pandemic, Saucony was able to reach new customers. About two-thirds (65%) of consumers who bought Saucony’s products after seeing its ads on Amazon Fire were new customers, Smith said.

“Purchase intent was a big needle we wanted to move. From a results perspective, we saw a pretty big purchase consideration lift in both YouTube and Roku users,” she said. “With Amazon Fire users, we saw that we moved the needle on purchase intent, but also were able to bring in new buyers to the brand.”

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.

Case in point – the ability to target ads in CTV also creates new management tasks around the traditional TV ad “pod”.

That is according to one seasoned video ad-tech exec. In this video interview with Beet.TV,  Mike Baker, who co-founded dataxu and then sold it to Roku last year, discusses the approaches that need to be taken.

The commercial break

Baker says differences in the way linear and connected TV manage commercial breaks sometimes leave CTV needing improvement.

“The ad pod is well-managed in linear TV environments (but), due to the way the CTV plumbing works … repetitive ads can sort of pour into the same ad pod,” he says.

He blames factors like app engineering, stream encoding, app makers’ decisions, broadcaster factors and splits on inventory often conflicting.

As a solution, he advocates a “standardized taxonomy” for ads, Ad-ID, being brought to CTV, “so we can have a better consumer experience”.

Beyond spots

It’s bigger than plumbing, however.

Baker hails work being done at companies like Hulu and Roku to go beyond the traditional interstitial commercial break experience, “with more creative integrations into the viewer experience”, and work from outfits like IRIS TV and Pixability which crunch YouTube videos to make descriptive signals that describe their inner content.

Baker joined the board of Pixability in March 2020 after his dataxu was sold to Roku for $150 million. The company aims to increase brand suitability for YouTube ad buyers – something Baker says is important since a growing proportion of YouTube viewing is now carried out on TV sets.

In fact, Nielsen Streaming Meter says, of the 25% of TV time spent with streaming video, 20% goes to YouTube, making it the second-most-watched digital video platform after Netflix.

Accordingly, YouTube’s CTV ad revenue is growing fast.

Behold, the contextual graph?

All of which makes the efficacy of YouTube ad sales all the more important.

Companies like Pixability and IRIS TV aim to turn video content into metadata signals, surfaced in buying platforms, that ad buyers can leverage or swerve. They are enabling the new wave of “contextual” video ad targeting.

“Companies like dataxu were innovators in creating a consumer data graph,” Baker says of his old firm.

“But I think it’s time for a context graph and not just for Google to create its federated learning of cohorts. Really, everybody should be working on how the creative fit of the advertising and the content go together.”

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.

With digital advertising’s traditional signals being reduced in usefulness, many in the industry have looked toward contextual targeting as an alternative.

But, in this video interview with Beet.TV, Rob Norman, director at the media platform Piano, describes a three-pronged way forward.

Triple-play

“I’m not sure how much of a signal context really is,” Norman says. “But one of the reasons why I look a lot towards YouTube on TV and Fire TV on Amazon is, when I think about the most powerful signals that we came to associate with online advertising, we think about identity as one powerful signature. But we think about intent as an incredibly powerful signal.

“We think about purchasing and transactions as a valuable signal as well. You really don’t have to look much further than Google’s trove of intent data, which drives the YouTube TV advertising system and Amazon’s trove and transaction data, which drives the Fire TV system.

“If you look at this troika of intent on YouTube, of transactions on Amazon and of cross-device graphs that exist in the Roku ecosystem, particularly after their purchase of dataxu and their more recent purchase of assets from Nielsen, I think you see in those three groups, a shape of connected TV and targeting and attribution, which has moved beyond the straight identifier cookie-based world of the online advertising market. I think there’s terrific opportunity in that.”

CTV outlook

In November, eMarketer forecast US connected TV ad spending would reach $11.36 billion in 2021 – 4.2% of total US media ad spending.

The medium is going through a tipping point at which the majority of ad dollars will be automatically traded.

Today, YouTube, Hulu, and Roku take half of all CTV ad revenue.

But, for all the eyeballs they control, the hardware OEMs will want a bigger slice of the pie.

Identifying the future

“In connected TV, we have a persistent identifier, still, called the IP address, and we also have device IDs,” Norman says. “Some combination of IP addresses and device IDs is going to remain important at least for a time.

“But some people will be looking ahead beyond that and making some assumptions that maybe even those areas will start to deprecate. Who knows what’s going to happen as an even bigger range of walled gardens starts to emerge?

“We’ve become familiar with the Amazon walled gardens and the Facebook walled gardens, but we’re about to become familiar with device-led walled gardens, operated by people like LG, Samsung, and Vizio. The use of identifiers in the TV market is evolving at really quite a space. What I’m hoping people are going to do is to stand back and look at other forms of signal other than identifiers.”

Shifting sands

Norman is referring to how the original equipment manufacturers (OEMs) in the TV space are becoming powerful by running in-house ad data organizations.

They are the primary class of company that, using ACR (automatic content recognition), is able to gain “glass-level” understanding of consumers’ actual viewing behaviour.

As they do that, however, there is a growing concern that the OEMs may start to withhold that data from an industry that was getting used to using it.

In October, Vizio reorganized to integrate Inscape, its ACR business, into its main advertising and content business. Inscape, which has supplied its ACR data to other ad-tech companies, is now no longer independent.

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.

“The shift from linear to digital is happening, and that just continues to happen at a rapid pace,” David George, CEO of video ad-tech startup Pixability, said in this interview with Beet.TV. “Last year really accelerated that shift. CTV has picked up as the dominant way for folks to consume content, which makes it attractive to brands.”

Media buyers use his company’s PixabilityONE platform to improve the targeting of their ads on YouTube, the Google-owned video site whose ad revenue surged 31% to $19.8 billion last year. However, the company is expanding to CTV services including Amazon Fire and Roku as their viewership grows.

“YouTube on TV has been a dominant platform for advertisers to reach their audiences,” George said. “We were the first company to actually execute YouTube on TV campaigns as a third party with YouTube.”

Pixability’s platform is integrated with YouTube, giving it access to application program interface (API) data as part of the YouTube Measurement Program. Pixability provides data analysis tools to help brands and their agencies with targeting, both as a self-service platform and with managed services — or a hybrid of the two.

“Some of the largest clients on YouTube actually leverage us as their YouTube partner,” George said. “Our clients are getting more sophisticated around video advertising, which is fantastic. There’s a keen interest around connected TV, which we’re at the forefront with our clients as well.”

With many people spending more time at home during the pandemic, YouTube’s usage and adoption grew — especially on CTV devices like smart TVs. YouTube is the dominant ad-based video on demand (AVOD) service for 18- to 54-year-olds, George said.

“Brands, as they’ve learned more about its reach into the living room are looking at it much more as a strategic, if not the most strategic platform to reach their audiences,” he said. “In the coming 12 to 18 months, you’re going to see a lot of innovation around that. For Pixability in particular, you will some new product innovations coming out over the coming year. In addition to that, some relevant partnerships that will help accelerate the whole industry and be extremely valuable for our customers.”

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.

But now YouTube is the number-two streaming media platform on TVs and amongst the largest beneficiaries of connected TV advertising spend.

In this video interview with Beet.TV, Pixability advisor and former Dunkin’ CMO Tony Weisman charts YouTube’s rise – and why it is so important to marketers today.

The small acorn

Weisman, who was also CEO for DigitasLBi in North America, reminisces about early YouTube NewFront presentations, when the platform was simultaneously education ad buyers and trying to win their spending commitments.

“Nobody even thought about having YouTube as part of it,” Weisman recalls. “The next thing you know, it became sort of the tent pole of NewFront week.”

Still, it nevertheless took buyers a little time to understand YouTube’s unique proposition.

“We met these creators who most of us had never heard of,” Weisman says. “And then we’d go outside, and there were literally thousands of largely teens waiting outside because word had spread that had creator they loved was there.

“It was an ‘a-ha’ moment for me that these creators were going to be able to command huge audiences and, as a result, massive advertising budgets. And that they had tapped into an audience that most of us were seeking for one reason or another but weren’t aware of how to reach.”

CTV gargantuan

That’s all changed now, of course.

Nielsen Streaming Meter says, of the 25% of TV time spent with streaming video, 20% goes to YouTube, making it the second-most-watched digital video platform after Netflix.

Accordingly, YouTube’s CTV ad revenue is growing fast. YouTube is up there with Roku but behind Hulu for taking CTV ad dollars.

YouTube is critical

“YouTube in particular that has gone from being interesting to big, to critical,” Weisman says. “YouTube is a critical component of every media buyer’s buy right now.

“They’ve made enormous strides in searchability and safety in reliability. They’ve done really, really smart things to build the brand and the offerings. It’s no longer a question about whether or not you’re going to invest in YouTube, but are you going to do it smartly?

“Or are you going to do it with somebody who can, you know, who can really make sure that that investment is wise or are you just going to take your chances. And I would not advise anyone to just take their chances.”

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.

“As we anticipated, more eyeballs have shifted to TV screens watching YouTube,” Jackie Paulino, chief product officer at video ad-tech startup Pixability, said in this interview with Beet.TV. “A lot of people don’t know that TV screens make up a large portion of impressions served on YouTube — we’ve seen as high as 35% — and that YouTube is a major player in the connected TV space.”

Pixability has migrated into the CTV arena as consumers spend more time with streaming video, including premium offerings on a growing variety of services.

“Pixability has always been about premium video first, because we feel like for advertisers and consumers that YouTube is really a good place to watch video,” Paulino said. “It’s a ‘lean-back’ type of experience — you’re not necessarily just scrolling through a news feed. The transition to television screens was definitely a natural for Pixability as well as it was for YouTube.”

YouTube also is a flexible advertising platform, giving viewers a chance to skip ads after a few seconds or watch the entire spot — and even respond to a call-to-action. Pixability is focused on the YouTube app, which is available in the app stores for a variety of CTV platforms, and not YouTube TV, which is its streaming bundle.

Optimizing CTV Campaigns

YouTube’s strength comes from its massive reach of more than 2 billion users worldwide, though advertisers can target highly specific audience segments. The platform also has shoppable ad formats for marketers that seek to drive a direct response in the lower part of the purchase funnel.

“We really make sure we’re showing the right ad to the right person at the right time, and that the ad is very targeted to the individual as well as the content,” Paulino said. “We can look at where you’re running your ads, and say the types of content you would want, depending on who your audience is. There’re lots of different targeting types, lots of different ways to optimize you ads, and we have technology that helps do that as well.”

Pixabilty also provides ad placements on other CTV platforms including Amazon’s Fire TV and Roku, which have gained popularity as people seek a bigger variety of programming to watch on connected devices.

Source: eMarketer

“Each of the platforms has pluses and minuses when it comes to things you can target,” Paulino said. “What we want to focus on is helping advertisers look at all these different premium video places, and understand where’s the best place for you to run your ad.”

Pixability provides planning, optimization and reporting services that include data about ad engagement. That information ranges from skipped ads on YouTube to data about sales activity on Amazon.

Paulino expects measurement tools to evolve, helping advertisers evaluate the effects of their campaigns on store visits and sales.

“Where I’d like to see things moving at Pixability and other partners…is really more focused around conversions and lower-funnel measurement,” Paulino said. “There’s just so much available data that it’s important for us to focus on the right things — are we helping advertisers sell their products?”

You are watching “Driving Reach and Results on Connected TV,” a Beet.TV leadership series presented by Pixability. For more videos, please visit this page.