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- How Ad Tech Is Like A Roomba
(Originally published in TVREV’s Thought Leaders Circle for OrkaTV)
Twice a week, chaos ensues in my house. My Roomba is programmed to run Monday and Friday mornings and does a great job keeping to that schedule.
What it doesn’t do a great job at…well, its actual job.
The Roomba is supposed to be a revolutionary “set it and forget it” robo vacuum cleaner. Each time it runs, instead of being helpful, it gets stuck under the bed, it gets stuck between the bar stools, then it rips my iPhone charger out of the wall and tries to consume it. All while terrorizing my poor dog.
I’ve realized recently that Connected TV (CTV) ad tech is a lot like a Roomba.
Let me explain.
Every company in CTV ad tech is focused on the most innovative way to “solve” advertising. The big buzzword of the day is artificial intelligence (AI). If we could only push humans aside and automate everything, then all the money will flow from linear and cable to CTV.
Well, that ain’t working.
CTVs Growing, but the Dollars Aint Flowin’
CTV has accounted for nearly 40% of time spent watching video content in 2023 but only attracts 15% of ad spend, according to eMarketer.
Why is that the case? We ran a poll asking our audience what’s holding buyers back from shifting more spend to CTV, and the answer was clear. 55% of respondents said “buying complexity” is the main reason why they don’t allocate more spend, with “fear of ad fraud” coming in second at 36%.
Those are stats the CTV ad tech industry should be ashamed of.
Every ad tech company thinks AI is the answer to this problem. They are wrong.
Earlier this year, Meta’s AI-powered ad-buying tool bugged out according to AdExchanger reporting, costing advertisers tens, if not hundreds, of millions of dollars. Advertisers that spend tens of millions of dollars per year on Meta couldn’t contact a human account rep for days, while the automated system failed to fix anything.
Google is facing similar scrutiny over claims it misled advertisers about where it places video ads. Research from the analytics company Adalytics suggests that Google may have cost media buyers billions of digital ad dollars by putting ads on sites in ways that violate Google’s own standards. Automation strikes again.
Big tech will tell you the answer is to trust they will continue to fine-tune the AI algorithms, but just like my Roomba, they always seem to get stuck under the dining room chair.
The Answer is TV…but Better
Ad tech companies trying to attract ad spend from TV to streaming with fancy new AI jargon miss the point. TV’s primary benefit has always been simple to understand. It provides branding and awareness at scale, in an environment that delivers brand lift by association with prestige content and other brand-name advertisers.
But don’t just take my word for it. A study by the Advertising Research Foundation (ARF) found that TV advertising generated a 20% lift in brand awareness and a 15% lift in purchase intent, compared to digital advertising, which generated a 12% lift in brand awareness and a 9% lift in purchase intent.
Streaming has a chance to deliver even more brand value than traditional TV with what we refer to as “Streaming TV.”
It’s traditional TV, but better. Here’s why:
Traditional TV ads are pre-scheduled a month ahead of time without knowing who the audience will be. Streaming TV, however, delivers a contextually relevant ad to your target audience only when they are watching.
Also, TV networks may give you a report on the performance of your campaign a few weeks after it runs… if you’re lucky. But how are you supposed to use that to optimize spend for your next campaign? Streaming TV enables ad tech providers to offer real-time reporting on key performance indicators (KPIs) such as average CPM, how your campaign is pacing, and return on ad spend (ROAS). This then lets you make changes while the campaign is running, so you can extract the most value from your budget.
On streaming TV, one impression equals one ad played on one television. Period. No more statistics, probabilities, or “representative families.”
Conclusion
The targeting and reporting advantages of streaming TV are clear, so buyers looking to shift budgets from traditional television to CTV just need trusted, human partners who will pick up the phone when things inevitably go wrong — not fully automated solutions that overcomplicate ad buys and miss the core value proposition of TV.
Streaming TV ad spend will overtake linear when buying is as straightforward as traditional television, and advertisers can trust that the audience they are reaching is still the one enjoying great content from the comfort of their couch.
Summer Roundup
If you haven’t had enough industry insider commentary on the state of streaming, check out my previous posts.
The Real Streaming Wars
Top FAST Services
What’s Next
Have a relaxing Labor Day Weekend. I’ll be back with a series of posts trying to answer how and when FAST will replace television and what that means for the current ecosystem.
🤙 Moffie