Interest in Alternative Currencies Grows, But Legacy Currency Still Reigns
The U.S. joint industry committee (JIC) granted “conditional certification” to three alternative ad currencies for cross-platform negotiations: Comscore, iSpot and VideoAmp. The certification of these alternative currencies suggests that the industry is more open to the usage of alternative currencies, and that there is room for multiple currencies to transact against. Our insights back up this industry push, as we recently found that a majority of advertisers support a multi-currency landscape.
Acceptance of the idea of alternative currencies to transact TV and CTV buys has come a long way over the past few years. While full acceptance is still in the future, advertisers are now more open to dialogue and testing. Two-thirds of advertisers think that it is important to agree on a common short-list of currency providers, with many estimating that they will use between 2-3 currencies in the next two years. However, that is their limit as most thought that the industry should support no more than 4 alternative currencies in total.
We also found that advertisers need a compelling reason to begin using alternate currencies. More than 40% of advertisers who have tested new solutions found alternative currencies to be just as effective as legacy currency, suggesting that more needs to be done in order to get advertisers to switch over.
Traditional currency has been the standard of the industry for years, giving advertisers a sense of familiarity and ease of use. Advertisers know what to expect and understand the metrics being offered. As such, adoption will continue to be slow and transactions using alternative currencies will still represent a minority of buys for a foreseeable future.
To get advertisers to embrace new currencies, alternative currency providers need to offer something unique from what’s currently being offered by a traditional currency, like access to advanced audiences. It’s important that alternative currency providers demonstrate the benefits advertisers receive from shifting away from the norm.
Alternative currencies can help their case by offering different performance capabilities and methodologies that are built on robust data. Our insights found that performance capabilities and transparent methodologies are the two most important attributes for advertisers when selecting a new provider, alternative currencies should focus on these attributes to stand out.
Overall, we expect advertisers to continue to utilize traditional methods for buying while they continue to test alternative currencies. However, opportunity abounds for those alternative currencies willing to offer unique capabilities and deliver an experience that goes beyond what is offered by traditional currency. Looking ahead, expect some consolidation in the currency marketplace as providers look to strengthen their case to compete against legacy currency and deliver a strong alternative currency to transact against.