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Why Big Media Companies Should Bet on Local Advertisers to Enhance Viewers’ CTV Experience

(source: AdWeek)

Programmatic advertising once faced its fair share of critics. Among TV executives, the idea of moving into programmatic sparked worry, if not fear. Most were concerned that the downsides of display advertising—think low prices and hefty ad-tech taxes—might carry over to streaming.

Fast forward to 2023. Attitudes have changed radically. Disney recently pledged to automate half of its ad sales in the coming years. Similarly, NBCU says that upwards of 60% of its streaming ad deals now arrive via programmatic activations.

There’s no denying programmatic will play an integral role in connected TV (CTV), which is forecasted to grow to $25.9 billion globally in 2023. But that doesn’t mean CTV doesn’t have its own set of programmatic-driven challenges. The streaming revolution promises to help advertisers combine the impact of the TV screen with the data needed to optimize viewer experience.

Yet over the past few years, reports have shown that even as streaming TV surged, the ads remain on repeat. Ask viewers if they are still experiencing ad fatigue today, and the overwhelming majority will likely answer with an emphatic “yes.” While there have been numerous initiatives aimed at addressing this frequency frustration, the challenges remain. However, there is a simple way to fix this—one that benefits streamers, brands and consumers.

It’s time for CTV to lean into local.

Follow the Meta and Alphabet playbook

Historically, the CTV ad market has been driven by “TV money” moving to streaming in search of lost reach. As a result, the majority of streaming ad dollars have been big Fortune 500 brands and agency-holding companies. So, there’s a reason viewers are seeing that same insurance ad 15 times a day.

Even as CTV advertising booms, this oversaturated market threatens to impact the viewer experience—inadvertently hurting the reputation of big media companies, streaming apps and even device makers—not to mention, the advertisers.

Right now, CTV is poised to enjoy a similar transformation as when Facebook launched its self-service ad platform, potentially opening the floodgates to millions of smaller, local advertisers to start reaching customers on the platform. That is, if the industry is able to recognize and take advantage of the opportunity in front of it.

The timing is ripe for TV’s transformation

Thankfully, unlike previous market shifts, this time around both the technology and the market are ready for such a transition. They don’t need to catch up to consumer behavior.

For example, broadcasters that have historically had boots on the ground since the heyday of linear TV are working to help migrate local advertisers to streaming and reach those audiences cutting the cord. These companies already have several years of experience helping usher traditional brands to these channels.

TV players are also providing local businesses with “self-serve” technology stacks—not unlike those that have buoyed Facebook and Google’s massive growth over the past decade. These offerings should lower the barrier to entry and enable advertisers big and small to tell their story on the big screen.

More advertising demand is great for all parties. By opening the door to these millions of local brands, local CTV could help fix many of the medium’s early ills. These new advertisers will bring in an entirely new pool of premium video ads, creating more liquidity in the market and helping to solve the frequency problem.

Ultimately, TV must continue to scale. An infusion of new demand and advertisers from the local space can provide more fuel for a surging ad vehicle while helping to better the medium for the most crucial constituency of all—the viewing public. That’s vital if CTV is going to live up to its billing as the ultimate combination of TV’s storytelling and digital advertising’s targeting magic.

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