"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by John Hamilton, CEO and founder of TVDataNow.

CTV provides large audiences typically offered by linear TV advertising with more opportunities for targeting and insights from campaign results. The format currently attracts 190 million US viewers (60% of the total US population), and that number will only increase.

But the CTV ecosystem does not feature a player the size of Google or Facebook, where advertisers only need to work with one platform to maximize efficiency. Unfortunately, many advertisers and their agencies are pursuing a narrow CTV strategy that fails to take advantage of the breadth of addressable audience and targeting options.

A significant number of ad buyers only advertise with one publisher, such as Hulu (estimated $2.24B in ad revenue in 2020) or one platform such as Roku (which could top $1 billion in 2020 ad revenue). While there can be benefits for certain clients to pursue such a streamlined approach, most advertisers will accrue better ROI from a waterfall portfolio approach.

They ask which one can give them better CPM and choose to build a deep relationship with them. We think this is the wrong approach. In this article, we’ll discuss why a portfolio-buying strategy in CTV is optimal. 

How to maximize waterfall buying on CTV

Most advertisers should identify at least five direct relationships with individual platforms or publishers to drive better rates, receive greater access to new opportunities and more efficiently target a mass audience.

Many of our clients have found success with Hulu (89M+ ad-supported viewers), Tubi (25M+ MAUs) and Pluto (26.5M+ monthly viewers and 200+ content partners) for both breadth of placement options and audience diversity. Combined, these three partners provide advertisers with large audiences with little reach overlap and robust data.

We often recommend those as starting points, with the advertiser choosing the other direct relationships based on their branding, campaign goals and target audiences for your products and services.

From there, we recommend working directly with Roku and limiting the buy to the top 100 publishers (subtracting any publishers with whom you have bought directly). By focusing your investment on those top 100 publishers, you minimize potential issues with smaller publishers, such as brand safety or quality concerns.

Here are four reasons why we recommend Portfolio Waterfall Buying.

Messaging safety

By working with multiple publishers directly, advertisers can better ensure the correct placement of ads and reduce the opportunity for fraud. While COVID-19 has increased CTV use, it has increased the potential for fraud as well. When you get beyond the top 100 apps on the major platforms, quality and concerns about spam content increases.

Large, diverse audiences 

Unlike linear TV, where every cable tier subscriber has more or less the same access to channels, CTV users use at most five or six apps and one operating system. By limiting your focus to between one to three apps, you are missing a whole universe of potentially receptive consumers.

It’s important to especially target Tubi and Pluto, as they only have a small overlap of the same audience, while also being among the largest publishers available on CTV.

More opportunities for different creative to shine

We know from digital buying that different creative will resonate with even the same audiences depending on the content against which it runs. Likewise, advertiser creative will have a different effect on audiences depending on the CTV publisher. If you just buy on Hulu, for instance, many of your creative may fall flat because of the surrounding content, whereas they might perform well in the context of Tubi or Peacock. A diversified portfolio enables advertisers to mix up the creative they supply to identify higher ROI.

Identifying the best ROI

We all know the inherent difficulties in measuring linear TV. CTV, on the other hand, has introduced the data-first mentality of digital buying to the TV. While digital media measurement centers on the last click, CTV requires a different approach as the media is not “clickable.”

But analytics can help understand “attention” such as a) how much of the ad one person watched and b) whether a person is definitively engaged and in the room judged by the fact that they pressed pause, fast forward, rewind or another button.

Now go do it

Advertisers and their agencies can easily buy CTV advertising through Portfolio Waterfall Buying, thanks to the advanced technology, data and methodology offered today. The above blueprint is a great way to expand your audience and eventually make smarter buying decisions based on real data and a verifiable ROI.

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