With national advertising on the ropes, local direct is still the mainstream revenue source for growth in 2022. Philip Jay LeNoble, PhD.

COMMENTARY

Digital Ad Dollars Shift To CTV -- And Other 2022 Predictions

• by Karlene Lukovitz  @KLmarketdaily, 11 hours ago

This being prime predictions season, I thought we’d end 2021 with a few offered by executives at some of the ad-tech and measurement firms on the front lines. The comments have been edited for flow and length purposes.

John Hamilton, CEO, TVDataNow:

Growth in CTV ad spend in 2022 will come in large part from money shifting from digital budgets, rather than from linear TV. Up to now, the bulk of CTV spend has come from traditional linear advertisers trying to capture audiences on CTV. But as digital performance likely craters due to the disappearance of cookies and the gatekeepers exerting more control over their ecosystems, digital marketers will also turn to CTV. 

Raw programmatic spending will grow as part of the overall growth in CTV ad spend. Still, we don't predict an increase in programmatic market share. iDirect campaigns — including those through private marketplaces/PMPs — will still be important to the largest publishers, with the longer-tail publishers opting to monetize programmatically until they reach scale.

Clean rooms — software that enables companies to match user-level data without sharing raw data — will become hugely important for CTV, as well as digital advertising. With the changes in cookies and attribution, many companies are emerging as clean-room partners to enable walled gardens to deliver performance insights to brand advertisers. Clean rooms will also help large publishers, platforms and DSPs better control privacy and security while still being able to measure CTV advertising effectiveness.

Nielsen hasn’t solved CTV’s attribution problem, and it doesn’t look like they will. Next year, a host of players will vie to step into the breach to make sure that CTV gets full credit and attribution for the performance it delivers across the marketing funnel, from brand awareness through purchase. While we don’t expect to see a complete attribution product next year, we will see a lot of progress.

Joe Hirsch, general manager, SpringServe (now part of Magnite):

Due to the vast number of CTV services available to consumers, ad-free subscriber growth will hit a ceiling in 2022. Advertising will be CTV publishers’ long-term revenue generator. At least for the present, amid the fierce competition to win over engaged audiences and convince viewers to keep tuning in, these publishers will be more focused on providing ad quality and an impeccable, seamless viewer experience than on maximizing ad revenue in the short term.

Server-side header bidding, in which higher bids can supersede a direct-sold campaign, will become mainstream in CTV buying next year. That, combined with unified auctions that allow competition between programmatic and direct-sold campaigns, will give publishers opportunities to manage direct and programmatic campaigns more efficiently and transparently.

With more than 80% of U.S households now owning at least one internet-connected TV device, hardware manufacturers, or OEMs, are a critical bridge between content and viewers — and they will play a growing role in CTV advertising. We’ve already seen them taking a stronger stance on negotiating carriage agreements. In 2022, they’ll pay more attention to the viewer experience and fine-tune their advertising and data strategies.

Chris Kelly, CEO, Upwave:

First, RIP to gross rating points. With automatic content recognition technology tracking impressions on devices and multichannel video programming distributors counting impressions on set-top boxes, why should we force marketers to complicate performance assessment by measuring traffic in gross rating points for one channel and impressions for another?

Second, with CTV ad spending projected to outpace both OOH and newspaper spending in 2022, the stage is set for CTV-centric agencies to emerge. For years, TV and digital agencies have fought over brands’ emerging CTV budgets. But it takes the best of both disciplines — the granular targeting of digital, and the full-screen storytelling of TV — to do CTV right. Enter a new breed of experts: agencies that specialize in marrying the two skillsets. 

Peter Docherty, CTO, ThinkAnalytics:

I’ve been predicting “super-aggregation” for four years, but it’s actually started to happen in the past 12 months. Tata Sky implemented universal search across 11 apps in one deployment, and another operator is now offering subscribers personalized content discovery, including voice search, across multiple streaming services, linear, VOD, catch-up and recorded content, in 15 languages across seven countries.

Those are massive leaps over “aggregation light,” where viewers can access multiple apps through the electronic programming guide/EPG, but must launch individual apps to search for something to watch. In 2022, we’ll see more video service providers supersizing their aggregation services with silo-free universal search. 

Data-driven streaming — fast-flowing, dynamic data streams from devices, platforms, metadata and consumer behavior harnessed for ultra-dynamic, rapid decision-making — will increasingly supplant stagnant data lakes and outdated ways of evolving the UX, like surveys.

Next year, video service providers who work their data hard to optimize the customer journey and proactively adapt to viewers’ needs will boost audience engagement and consumer satisfaction and open up monetization opportunities.

Targeted advertising is also set to break through in 2022. Recent consumer profiling advancements mean that TV advertisers can now reach highly segmented audience niches that they recognize, value and can measure, including those important but elusive “light” TV viewer categories.

We expect to see the adoption of the Internet Advertising Bureau taxonomy for addressable TV advertising. This will remove the friction involved in buying and running cross-media campaigns that include targeted TV ads.

We also expect breakthroughs in predictive behavioral analysis to enable predicting viewers’ purchase intent, as well as dynamically capturing and building audience segments that reveal an enhanced interest in a particular purchasing category at a particular time.

Shafi Mustafa, VP of product marketing, ElementalTV:

We’re in the first phase of CTV ad tech, working out the growing pains of connecting the pipes and understanding the medium. The next phase will focus on how advertisers can leverage digital tools to connect the screen and audience. We expect to see tremendous innovation in large-scale personalization of ads to create relevance for the audience and enable new types of interactions with the screen. Advanced ad formats will allow brands to personalize CTV ads seamlessly at scale, reduce ad repetition, deliver personalized experiences in the optimal context for dynamic brand storytelling, enable new types of audience interactions with the screen, and generally deliver a superior viewing experience.  

John Ross, director of product strategy, DoubleVerify:

While linear TV provides show, episode and time slot information for buyers, advertisers are forced to run CTV campaigns with minimal information. In some cases, they don’t even know what app they're serving into. This black box is not only a measurement and targeting problem, but a brand suitability problem.

As advertisers continue to move ad spend to CTV in 2022, we’ll see increased demand for transparency and industry standardization across CTV buys — and stepped-up efforts by publishers in response. Publishers on CTV have first-party data ranging from user-based data to programming information, and we’ll start to see them package this data anonymously through contextual targeting to achieve genre-level transparency for buyers.

Advertisers will also become more aware of another growing issue in CTV: ad campaigns that continue to run when the TV screen is turned off, because a third-party CTV device like Google Chromecast or Amazon Fire Stick is still on. Our tests with popular streaming apps confirmed that in many cases, the apps continue to play — and generate ad impressions — for minutes, hours or even days. That can have a dramatic effect on campaign performance, spend and measurement. This isn’t ad fraud or anything nefarious; it’s just a common technological problem across CTV.

Social media ad spend is expected to exceed $56 billion by 2023,  and a significant amount of that will go to social video. But social media can be a minefield for brand safety and suitability. Ads are often mixed into feeds filled largely with user-generated content that can contain misinformation or present myriad other issues. In 2022, marketers will look for comprehensive ways to measure walled gardens so that they can effectively target the most appropriate and impactful content, maximize campaign engagement, and safeguard their dollars. Performance optimization, third-party auditing and verification will be increasingly critical.