Key Points:
- Many marketers prioritize audience-based targeting on CTV, even when brand-building goals call for broader approaches, leading to limited effectiveness.
- Nearly one-third of media professionals say CTV is not very effective, despite ad spending projected to rise 12% this year to $26.6 billion.
- Over half of marketers are unfamiliar with contextual targeting, though Gracenote says standardized metadata could unlock scale and boost CTV ad spending.
Connected television (CTV) advertising continues to be attractive to brands and marketers, but many are using it incorrectly by leveraging targeting tactics for broad marketing initiatives rather than precision campaigns that they are better suited for.
That was one of the key takeaways from a new report released by Gracenote, the content data division of measurement powerhouse Nielsen, which highlighted the disconnected between marketing goals and campaign executions on CTV platforms.
While many brand and agency executives cite top-of-the-funnel objectives like brand awareness as priorities for CTV, their preferred methods lean toward audience-based targeting, which is often narrower in scope. Four out of five respondents to a survey used by Gracenote for the report said they prioritize some form of audience targeting in their spots — even when they don’t necessarily need to do so, because their campaign goals don’t call for that level of precision.
That imbalance may be contributing to underwhelming results, Gracenote said. The company found nearly one-third of media professionals do not view CTV as an effective way to reach consumers, though they continue to increase their marketing budgets across that platform. At a time when the Interactive Advertising Bureau (IAB) projects CTV ad budgets to increase to $26.6 billion (up 12 percent from last year), the fact that brands are allocating massive amounts of money to a platform that, in some cases, delivers underwhelming results is a problem.
Jake Richardson, the Vice President of Partnerships at Gracenote, put it simply: Marketers who use narrow tactics, despite in their goals, are seeing limited returns on their investments.
“CTV has not delivered the scale and premium reach that marketers expect of the largest screen in the house, largely based on the use of narrow targeting tactics,” Richardson said. “By taking better advantage of contextual targeting capabilities with their CTV campaigns, they have new opportunities to drive both return on ads spend and the scale they’ve been looking for.”
Gracenote’s metadata helps pioneer contextual advertising, but awareness among marketers remains pretty low, with more than half of those surveyed by Gracenote saying they weren’t familiar with contextual targeting. Gracenote said most of the issues marketers complain when it comes to the effectiveness and outcomes of their campaigns can be solved using context-based approaches, rather than precision targeting.
Standardization in metadata is a key factor in unlocking future growth through CTV advertising: More than two-thirds of survey respondents said unified metadata across platforms was important, and 54 percent indicated that standardization would likely drive increased CTV ad spending.
Gracenote’s survey drew responses from U.S.-based brand and agency executives with influence over media planning and buying decisions across industries including entertainment, telecommunications, retail, automotive, financial services, consumer packaged goods and health care.
The report from Gracenote is available to download by clicking or tapping here.
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