When ad-supported content started running on streaming TV, the assumption was that it would be sold like digital display. But the two are vastly different. While linear ads are sold based on ratings and contextual confines, display ads are exchanged programmatically based on audiences and behavior. 

Streaming combines the best of both worlds, with TV style insights and fidelity down to each and every viewer. That’s why streaming needs a hybrid model that incorporates contextual placement with audience-based targeting. But that’s easier said than done. 

Most ad platforms weren’t built to handle the complexity that CTV advertising requires - especially in programmatic environments where decisions are made in milliseconds. As CTV continues toward viewership domination, ad platforms need to innovate to make the smartest ad decisions every time and deliver the efficiency, and results, that advertisers deserve. 

TV and digital create engagement, albeit differently 

Television encompasses sight, sound and motion, which allow the best TV commercials to leverage its not-so-secret weapon: emotions. Ads can be funny, sad, tense, romantic, scary or factual. This is why people can recall TV commercials they saw 20 years ago and why many popular TV ad slogans such as “Where’s the beef?” became pop culture fixtures. (On the flip side, what was the last memorable display ad you saw?)

Yet this strategy comes with the need for careful planning. Advertisers know that running ads in the wrong context—a comedy commercial during the funeral scene in a popular drama—can have disastrous effects, such as last year’s “Applebee’s Dilema” where a cheerful spot for the food chain was running over scenes of air raid sirens going off in Kyiv.

While TV ads rely on emotions and memorability, display advertising is almost always a direct response vehicle. The goal is to get someone to click and either buy the product immediately or, at the very least, visit the website. Where the ad runs is not all that important, provided it reaches the intended target.

Advertisers crave the assurance of TV

On linear, brands and agencies know exactly when and where their ads run, right down to the position on the ad pod. This allows them to control the context: what program, what scene, and what emotions were being generated?

Digital buyers mostly cannot offer this data, due to the lack of viable data around TV content that would allow their programmatic buying platforms to identify a show. With online ads, these platforms are able to use the URL of the page the ad appeared on to identify where it ran. But television has no URLs or any equivalent way of identifying content, and the metadata associated with TV shows is still very sparse.

This lack of transparency became a real issue for brand advertisers as it discounted the key difference between digital display ads and television commercials: emotion. 

Converging platforms to drive efficiency 

The good news though is that streaming doesn’t need to fall within the framework of legacy systems. Contextual vs. audience targeting is not an either/or decision. In fact, CTV will only reach its true potential when advertisers can utilize both the emotional impact of context and the efficiency of more precise targeting. 

So what’s stopping advertisers from running their CTV ads like that now? Well, it’s complex. Literally. Because CTV ads are sold programmatically, there are millions of queries that DSPs have to make decisions on every second. Layer on targeting parameters like location, demos, and behaviors across a large volume of campaigns, and the ask becomes that much more elaborate. 

Most streaming ad platforms can’t handle that complexity because they weren’t built for CTV. Instead, many were built for display ads and only rely on point solutions to sell CTV ads. These less sophisticated solutions are inefficient, which ultimately leads to poorer results for advertisers. 

On the other hand, what will drive performance on CTV is ensuring that every ad placement is optimized. To do that, ad platforms should utilize AI and machine-learning technologies that analyze massive amounts of data. This will drive decisioning engines to make split-second decisions about the best opportunities available. Needless to say, this will take tremendous innovation and scale. The ad platforms that will thrive are the ones that continually enhance their tech stacks and have the compute power to process the robust data this process requires. 

If streaming ad platforms make this investment, they will be richly rewarded with superior efficiency, which is what advertisers have been demanding for ages. The ability to optimally target consumers without sacrificing an unnecessary dollar from their ad budgets will transform advertising as we know it today. But, in a landscape where measurement currencies and attribution are also top of mind for industry players, who’s ready to step up to the plate?