Digital video audiences continue to grow across all devices and platforms. A trend that has accelerated because of COVID-19, it was predicted in the U.S. alone the number of consumers watching live video content would increase to 136.4M last year. What does this mean for publishers and advertisers?

We recently sat down with Geoffrey Lemaire, our Advanced TV Product Manager, for a Q&A session on the state of the advanced TV market.

Q. What is the status of the digital video market? How is video advertising today different than it was two years ago?

In the past few years, we’ve seen an expansion in the number of subscription video on demand (SVOD) services – Netflix, Apple TV, Disney+, CBS All Access, Peacock, HBO Max, etc. As more players enter the space, there may be limits to what consumers are willing to pay for, opening the door for the growth of advertising-based video on demand (AVOD). This will be interesting for advertisers because it will offer them access to very premium digital content.

New inventory based on TV apps is becoming available with the rise in CTV ownership and the biggest growth area we’re seeing currently is around the full-episode player (FEP). This convergence of digital and TV will also bring additional opportunities around targeting and personalization.

Q. What ad tech trends should video publishers understand – and follow – in order to ensure both long and short-term business growth?

Finding high quality video content can be difficult. We have seen emerging automated generated video, just to take their share of the video advertising opportunity. With these new TV-like formats, the size of premium digital video inventory is going to increase dramatically. Low quality content will become harder to monetize against premium content. Publishers should take advantage of this and develop and deploy high quality assets.

Q. How is addressable TV advertising different from linear TV? What should buyers know?

The big difference is that historically you were buying based on the context around the content – take sports, for example. In digital advertising, you have the ability to target more specific audiences. CPMs will be much higher and the same reach on digital will be more expensive than on TV, but, for that higher CPM advertisers can get improved targeting and performance.

What is interesting about the merging of TV and digital is the ability to manage reach and frequency. Advertisers might already have success on classical TV, but you can push for additional targeted views through digital.

Also, while data becomes more difficult to obtain online because of privacy requirements, the nature of CTV will allow advertisers to leverage audience data that marketers on the web will miss.

Q. What opportunities exist in advanced TV for advertisers that don’t exist in linear TV?

One of the many opportunities that exists is that it will become easier for smaller advertisers to participate. This convergence between digital and TV allows smaller advertisers to spend less to effectively target, which opens the platform to a wider range of advertisers.

Another opportunity is the ability to adjust frequency to optimize your campaigns. A TV campaign that might now last for 2-3 weeks could achieve the same results in ten days or a week. Personalization of ads using audience data and dynamic creative is also a great opportunity.

Q. What are the challenges in digital TV advertising?

Digital TV uses a variety of technologies that are different from those used on the web. One of the big challenges is verification and assuring brand safety. As technology changes the traditional workflows, advertisers will benefit from the expertise trusted partners provide.

Q. How can advertisers and publishers capitalize on the increase in viewers flocking to CTV?

While the increase we are seeing in TV is already declining as people switch back to their old habits, the important thing to grasp are the real trends underlying audience interests and behaviors. For example, YouTube consumption has been steadily increasing year after year. So, even with a pandemic-driven spike, the overall trend is still positive and something to consider as an advertiser or publisher building out your strategy.

Q. You’ve pointed out that data is a key opportunity. How do broadcasters and operators view their relationships with their audience and data?

What we’ve seen in Europe is a disagreement between broadcasters and operators over ownership of user data. Globally, operators believe they own the user relationship and, therefore, the data. However, when it comes to trying to sell it, broadcasters are saying without our content your operator data is meaningless.

And, the user relationships are a bit conflicted. Operators have owned the relationship with the user and broadcasters can’t function without the users. This has driven broadcasters to build their own logged in ecosystems and develop their own data signals. Apple TV, Disney+, CBS All Access, Peacock, and HBO Max are recent examples.

Q. How is Smart operating and innovating in video advertising and addressable TV?

With over 20 years of experience and a reputation as a best in class ad server and SSP, we bring that expertise to all our offerings. Two years ago we made a big investment in the converging TV/video space to leverage that expertise and innovate solutions that best serve the needs of advertisers, operators and content owners.

In that sense, we have rolled out a unified ad break auction feature and competitive exclusions as we continue to tackle the very technical challenges ahead in addressable TV. We are fully independent and operate our own infrastructure in addition to having a large team of developers and data scientists. This positions us very well for integrating with operators and providing an end-to-end solution.

We are also currently working to build a bridge between traditional TV inventory and our ecosystem that will allow ad decisioning mechanisms based on traditional TV ad scheduling data in the context of addressable linear TV advertising. By ingesting this traditional TV ad scheduling data, we will soon be able to perform enriched addressable linear TV advertising – essentially merging the best of both worlds.

Q. Why is it an advantage for Smart to provide an ad server and an SSP natively integrated for video advertising and addressable TV?

We have already explained some of the challenges in addressing the convergence between traditional broadcast and digital. These exist even without considering operational habits and huge corporate organizations that need to transform internally. Given this massive quandary, a robust ad server is required. Some have tried to handle it with homemade tools and met serious problems. This is especially true for broadcasters who have succeeded until now in protecting their business from tech taxes. These broadcasters have a unique relationship with their users and the data neutrality independent adtech partners provide is a high priority.

On the other hand, more and more clients, advertisers or agencies want to buy inventory programmatically. As a TV channel – even if it’s unlikely you go open auction – the emerging tendency is that a large part of addressable sales are going to be handled by digital teams. If the sales workflow isn’t unified, money will be left on the table. Selecting a fully independent, integrated ad server and SSP solution will allow you to move quickly, save time, and focus on your business without wasting time in endless integrations.

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