6 Questions Brands Should Ask When Evaluating Performance CTV Providers

A confluence of factors is driving a boom in the OTT/CTV advertising space. With more households watching more streaming content, advertisers have, of course, taken notice, increasingly shifting ad dollars toward OTT and CTV channels. In fact, CTV ad spending is expected to surge 40% by the end of this year, totaling over $14.4 billion, and is forecast to more than double to $29.5 billion by 2024. 

Naturally, as viewers and ad dollars have shifted toward OTT, many advertising technology platforms have followed suit, with more providers now offering CTV programmatic buying options with various targeting and attribution capabilities. CTV’s ability to merge the often-separated performance and brand marketing worlds—including its inherently addressable nature—is redefining the digital ad space and giving marketers a way to take their campaign measurement to the next level.

But with lots of opportunities to reach new audiences and so many options for targeting and optimization, some marketers are understandably intimidated and not sure where to start. To help brands who are new to the space, here are six questions to ask when considering dipping your toes into the performance CTV space.

  1. Is performance CTV right for your brand? First, ask yourself: does your brand fall within the bucket of brands that can benefit most from performance CTV, and is your brand prepared to get started? Brand awareness-focused advertisers will not be the best candidate for performance CTV, as it focuses on direct performance, conversions, and attribution. For example, a CPG retailer with a significant brand budget that is running linear ads and is focused on finding incremental reach—identifying additional households who are not watching linear TV that are over-indexing for your target personas—will not need performance CTV. Marketers must decide whether performance CTV fits their brand, strategy, campaign goals, and budget. It’s quite different from buying linear TV—it’s much more granular and requires detailed audience knowledge—so it’s important to be certain you have the data and insights to make it effective. 
  2. If it is relevant for your brand, how will you evaluate success? Before you invest any money, you must first determine which consumer actions matter most for your strategy. Will you measure sales, leads, page visits, or net new traffic? And how will you evaluate that goal? Will you consider CTV’s impact within your larger media mix or as a standalone channel? To measure against other media channels, you really need to have a data warehouse to effectively plug CTV data in and compare against other channels, working it into a larger strategy. If that’s your strategy, you’ll want to ask partners how transparent they are with conversion reporting. Otherwise, it’ll be difficult to see how it stacks up in return on ad spend (ROAS) and cost per action (CPA) compared to other channels.
  3. What is your preferred attribution methodology? Innovations in attribution have moved the focus away from just video completion rate and toward ROAS and CPA metrics, and even these are still just scratching the surface of CTV measurement. That’s why transparency in reporting by partners is essential. Many vendors in the CTV space are stuck on last touch, but effective performance CTV measurement means going beyond last touch—you need to know all touches that drove the desired action. For example, with the right platform, you can measure first touch (conversion credit assigned to the first exposure), last touch (conversion credit assigned to the last exposure), time decay (with more credit assigned to exposures approaching the point of conversion), and linear (where conversion credit is evenly distributed across all exposures). But all of these have inherent variables as well. Working with a provider that can help you sort through these variables to define attribution is critical for refining your budget strategy and future campaigns. 
  4. Can we measure incrementality? To determine the true business value of advertising, marketers must move past clicks and impressions toward higher-value metrics like revenue and net profit—how the marketing spend actually moves the needle. Incrementality allows you to do just that by measuring the lift in desired outcome in the campaign results above baseline native demand. And sometimes the interaction that influences the desired outcome may look more costly, but the impact delivers a higher ROAS. Regardless of whether you’re working with a multi-touch attribution provider across channels, when you’re running on CTV specifically, what works on direct-basis (without an incrementality multiplier) most likely doesn’t work with an incrementality multiplier. For example, Creative A might have a CPA of $15, and Creative B’s CPA is $20. But Creative A delivers only 50% incremental lift while Creative B delivers 90%. While A is cheaper, you should be optimizing for B based on effectiveness. You’ll want to choose a provider that allows you to measure incrementality to get a true picture of the impact of OTT on your overall ROAS while factoring in other media channels and ensuring native demand is accounted for. 
  5. Is real-time optimization available? A big part of the value in CTV advertising is that it’s fast and fluid—unlike buying linear TV where the buy is set with an IO and requires you to wait. CTV buying can be much more agile and dynamic, allowing you to optimize spending based on results as they come in. Having all this granular data is great, but what good is it if it just sits on the shelf? That’s why any platform you choose must provide real-time optimization and the ability to change audience targeting parameters on demand. Twice a week isn’t nearly enough—daily is ideal. 
  6. How much flexibility is there to shift ad spending? In the linear world, when you buy spots on FX, ABC, or ESPN, you own that spot for however long the IO dictates. And some CTV providers who buy spots direct from the publisher operate the same way. You might be able to buy Hulu, Sling, etc. at cheaper rates but you’ll get no flexibility. Instead, look for a performance CTV provider that offers flexible optimization that allows you to shift spending across publishers and platforms as you need to. This will allow you to target your intended audience regardless of what and where they view content and prevent you from getting locked into an ineffective buy. In the performance CTV realm, marketers need to be able to move ad spend at constant, flexible rates—leveraging data-driven campaign performance insights. 

CTV allows marketers to take advantage of new ad opportunities, and performance CTV, while not meant for every advertiser, offers a game-changing advantage in the modern media landscape. But taking the plunge into performance CTV can be daunting. By first learning the basics of how it works and then asking these questions of potential vendors, marketers can leverage sophisticated ad tech solutions to meet their needs without getting in over their heads. 

Ben Brenner is VP of Business Development & Strategy at Digital Remedy.

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