RTL-owned advertising technology vendor SpotX has broken down the video advertising market into four umbrella trends for 2019 – hoping to cover all bases to please everyone without really providing a framework for surviving the siege to come (aside from plugging its own products), nor putting its neck on the line with a bold statement of intent.
These are: New offerings will come into play for OTT video services; Traditional TV will continue to transform for today’s digital landscape; Shifting consumer expectations of ad experiences and personal data usage will drive innovations in ad transactions and delivery; and finally, Industry-wide transparency efforts and regulation will spur larger investments in data management.
In our book, trends are supposed to be concise and to the point, not convoluted and drawn out like those above. Granted, SpotX has broken out each of the four massive golf umbrella trends into three or four sub-trends but, still, overcomplication and lack of direction is generally the outcome when vendors take to writing. See the separate advertising story in this issue for a real taste of things to come, covering the latest ad report from our research arm Rethink TV – forecasting a double dip collapse in the coming years.
Perhaps the most pressing of the areas outlined in the 2019 Video Advertising Trends report, as we see it, relates to the advancements in targeted advertising and data collection, specifically for connected TVs, pegged by SpotX to be a significant trend for 2019, as indeed it was last year.
SpotX warns advertisers that the relatively new connected TV space is a different beast altogether compared to other internet-connected devices, in that connected TVs are cookie-less environments which obviously greatly limits targeting abilities.
“The data strategy surrounding CTV is still scaling – which limits current audience matching – but that is set to improve in 2019 and beyond. Therefore, adding multiple audience segments to a targeting strategy will likely result in losing scale for CTV campaigns. A new expectation of “targeting and scalability” needs to be kept in mind when crafting an advertising strategy for CTV – one that is ultimately less restrictive than online video,” states the report.
SpotX therefore predicts, in the near future, there will be increased buying and selling that mimics the way advertisers buy linear TV inventory, because most players in the space, primarily operators, broadcasters and programmers, have a wealth of user data just waiting to be harnessed. This means targeting in connected TV environments today is mainly focused on buying and selling based on audiences.
To support its point on the prevalence of audience-based buying, SpotX cites its own survey from last year showing that 85% of respondents believe that third-party data was a strong driver for the adoption of audience-based buying and selling of ads.
Yet the findings come amid grumblings about the state of services pushing targeted advertising and personalized content recommendations – on the premise that consumers are growing tired and cautious of such intrusiveness akin to how they would react to unwarranted advancements in a brick and mortar retail store. Indeed, some advertising insiders claim the rush by retail companies to adopt digital techniques has ultimately accelerated the death of the high street – but that’s a story for another day.
Could the same be true for online retail? Perhaps in the very long-term, but for now, SpotX has highlighted the increased importance of targeted advertising in a market in which total media ad spend came in at $628.6 billion in 2018, according to its own figures.
SpotX also touches on the important topic of opening up private marketplaces with data protection technology, citing how an influx of advertising regulators in the past few years has forced advertisers, publishers and media owners closer together – constricting the open marketplace.
Again, connected TVs are the premise of this particular trend, with this field in particular seeing a significant shift away from open marketplaces. SpotX says private marketplace transactions grew from 70% of all SpotX connected TV transactions in November 2016 to 96% in November 2018, projecting connected TV environments to continue to be largely private due to the premium nature and advertisers’ brand safety concerns.
“In 2019, more media owners and advertisers will leverage technology that allows them to open up these private marketplaces. Technology tools will emerge – such as the Audience Management Engine from SpotX – that will allow buyers and sellers to harness the power of first-party data they possess and programmatically bid and forecast against that data, all while keeping the data anonymous and secure,” states the report.
There is sub-trend we have to take issue with, however, titled “The future of TV isn’t as grim as some data suggests.” It claims the chasms left in pay TV subscriber bases of the major US operators will simply be offset by raising the subscription cost by just a few dollars a month to maintain a solid ARPU throughout. You don’t think they’ve already thought of that, SpotX, which is why all the major pay TV operators have launched streaming services priced substantially lower than a standard cable or satellite TV package, after hiking double, triple and quad play packages gradually going back years? The more obvious answer is one which will see the eventual hiking of subscription prices for these streaming services, a trend we are already witnessing despite the late entry of certain players, complemented in many cases by either a live ad-supported OTT service or AVoD option. Now that’s what we call trendspotting.