Connected TV: Targeting the Present for the Future

Whether it’s globally or in India, markets have barely scratched the surface of Connected TV. One needs to only look at the FICCI report of last year, which showed that in 2022 CTV has increased to 10 million and is predicted to be around 40 million by 2025.

What is Connected TV?

A CTV is basically any TV you can connect to the internet through which you can stream content. And while the percentage of CTV advertising is still a very minuscule part of total TV advertising, the next four-five years will change the game drastically for connected TV and the primary reason for that is affordability.

Quality television sets are available for less than $200 now in India, internet penetration is going up every day as we speak, even as data cost is getting lower, and becoming faster thanks to 5G coming in and I think content availability with more and more content creators are coming across. So that'll lead to that growth.

So the whole medium is still very much on the chalkboard stage from the lenses of both advertisers and premium content platforms, with the evolution being driven by a massive shift in consumer habits. Because if you look at the consumer TV viewership, it has shifted to more streaming platforms, but the advertising spends are yet to catch up.

And I think personally of CTV as a Trojan horse ride that will drive further adoption of data-driven advertising strategies more broadly. If you look at traditional linear TV, it's not measurable to the T. It's got big screen, bigger ad units, big eyeball impact, but it's not been data-driven till now.

What are the problems addressed by Connected Television, from a marketers’ lens?

The first was the lack of audience targeting, as presented by linear TV. As a very simple example, think of going to a grocery store without a shopping list. What will happen? You will end up either buying things that are not needed or you buy something which you already have.

Similarly, if you think about CTV, instead of a shopping list, now think about your first-party or third-party data. When you buy a programmatic guarantee which is fixed CPMS, fixed impression, then you cannot actually apply the first party and the third party data. So you're targeting the same users again and again who have purchased your product. With platforms like The Trade Desk, you can apply a bird's eye view to audiences. So that's the biggest problem that we are solving for brands

The second was a lack of holistic frequency control. So let's say if you are a cereal brand and you want to target breakfast lovers. And we all know how consumer journeys are fragmented due to lack of visibility, maybe because they're watching different content on different apps on different devices.

What was happening on traditional TVs in the morning is that as they flip through content. Most of the consumers are either over-bombarded with the same ad or they were not shown enough ads to have a solid brand recall. What CTV does is it helps you not to waste your budget. So it shows the right ad at the right time to the right users and the right frequency which is the most important thing. And all of that is doable using a Connected TV versus a linear TV.

Thirdly, TV was not never measurable, but it was less measurable. Digital is fully measurable. Now, let's say you're a super luxury car advertiser, which means your target audience is very, very niche. You want to reach out to a very small handful of people. Now if you do again a similar direct buy or a programmatic guaranteed buy, regardless of the ad exposure and its performance, you can never apply data-driven targeting to it; you cannot get insights out of it.

This basically means that you are showing the same ad to almost everyone between 20 to 65 and while a 20-year-old might have watched your ad or gone to your site only out of curiosity for the new launch, your real owner of the luxury car could be the 65-year-old person.

The challenge and irony, in India especially, is with the programmatic guarantee prevailing so high that you pay the same price for a 20 year old and to the 65 year old audience. However, we feel that you need to pay the right price.

That means maybe pay less for the 20 year olds audience in that category? They could be an aspiring audience, but you do not need to pay the same premium price that you pay for a 65 year old. This is where the balancing comes in. You want to pay less for less relevant target audiences and maybe take that same budget and put it to the people who have a high propensity to buy.

The Future of Connected TV

FAST (Free ad supported streaming TV) is the new buzzword and these services are the future of programmatic CTV advertising. In India, and even for the rest of the globe, FAST services are catching up now because as an ecosystem and an industry, we have previously done a poor job of explaining the value exchange on the Internet and that value exchange is that we see targeted ads in exchange for free content. We never told this to our consumers and this is where transparency comes into play.

And now even players like Disney and Netflix are coming up with ad-supported models and it works very well because if there are more targeted ads in exchange for free content, they can definitely get more incremental reach, as first party data can be applied there.