Ad targeting works best when a marketer’s message is delivered to the right person at the right time on the right screen. With CTV, determining those factors can be surprisingly difficult. Media buyers may not know which home they’re reaching, let alone who is watching at any given moment.
That’s in part because consumers receive CTV programming over internet-connected devices with IP addresses. Most household IP addresses are assigned dynamically, meaning they change regularly, at least every several months and as often as every few days. In fact, about 1.5% of homes’ IP addresses change on any given day. That daily rate of change means that in a month, as many as 45% of homes may have seen their IP addresses fluctuate. Addressing this challenge is technically difficult and as a result, many advertising providers are likely to have it wrong in a large number of cases.
A further targeting challenge is that even when an ad does reach the intended home, it may not be clear who is watching. The ad message is wasted when it’s sent to a home screen being watched only by someone who did not search for the product and, even more importantly, has no influence over the purchase of that product or service.
Marketers are clearly frustrated by the state of affairs. They tell the IAB they value connected TV for its ability to deliver their messages to “hard to reach audiences” including the rising numbers of cord-cutters. But, they say, one of the biggest drawbacks that deter them from using CTV platforms for their advertising is the lack of adequate metrics and measurement and that they can’t reliably assemble needed levels of scale. To hone in on the right viewers at the scale they need for CTV platforms, the current state of affairs seems to involve at least some guesswork.
One strategy marketers can use is to weigh ad spend toward products they believe will do better when delivered to home screens. Higher cost items that involve more than one household member’s input in the buying process — family vehicles and vacations, for example — should take precedence over lower-cost items that typically involve only one family member. Still, that is only a partial way of getting to where they want in reaching the right audiences at the right time in the home.