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12 May 2022

Strategus guides brands through CTV ad maze, trashes walled gardens

As we cover video ad tech increasingly, Faultline cannot help but get a sense of déjà vu. The endless seesaw between fragmentation scares and empty standardization promises can often leave us feeling seasick, but this also creates opportunities for vendors.

One such company holding advertisers’ hands is Strategus, a managed service provider that helps brands and agencies to run and measure highly targeted connected TV (CTV) campaigns.

While digital advertisers are largely well served when it comes to single self-serve ad platforms – think Google or Facebook’s in-house ad tools – there is no such comparable service for CTV. Speaking to Faultline this week, the company’s Co-founder and SVP of Strategy and Innovation, Joel Cox, says this fragmentation makes a “white glove managed service” like Strategus essential.

“Google and Facebook have been uniquely successful at simplifying a highly complex advertising process, but that same privilege does not apply to CTV,” Cox explained.

Since launching the first programmatic CTV campaign back in 2015, Strategus has looked to lead the way as traditional TV advertising budgets trickle over to CTV. “Marketers just don’t have the time to learn how to use cutting edge ad tech for CTV,” Cox says.

Strategus works with a range of brands across retail, franchise, and direct-to-consumer verticals – everything from car dealerships to breweries. These clients come with a campaign goal, ad creative and a target audience, and it is Strategus’ job to find the CTV audiences and deliver the results.

“The traditional mantra for video advertising has always been ‘position and placement,’ but that just doesn’t get us a fraction of the way around the track these days, although many of the linear guys still stick to it,” adds Strategus President Todd Porch, also on the call, who previously held significant advertising stints at both Comcast and Yahoo.

Cox concurred that effective targeting relies upon knowing exactly who is watching a title, rather than working from the title they are watching.

To achieve this, Strategus weaves together a range of siloed data sources to glean exactly who a CTV user is for advertisers. Location data can be taken by the likes of Foursquare and Factual, while online shopping data can come from Oracle.

With Strategus reliant on open data ecosystems, it was hardly a surprise to hear that Cox does not approve of certain CTV vendors going for the walled garden approach. He pointed to Vizio’s Inscape ad tech arm, which sells user automatic content recognition (ACR) data to exclusive partners – a move that saw the US TV maker’s share price drop from $27 to a current trading price of around $7.

Cox believes the market knows open data ecosystems are the way forward for guaranteeing premium ad experiences, and that eventually the pendulum will swing back. “People will try to sell their own data, but the ad pods will not sell, and users will churn. Eventually those companies will come back to an open inventory,” he predicted.

Cox pointed to a similar pattern that emerged in display advertising in the early 2010s. “Every website tried to sell their own inventory, but they quickly realized they did not have enough tentacles to reach the right advertisers and audiences,” he continued.

Strategus also does much of the legwork when it comes to campaign analytics and performance measurement, joining the dots to track all consumer actions post-ad exposure. Like everything in ad tech, Cox again expressed that these data sources are not only fragmenting but getting deeper and wider.

“People assume this industry is ‘plug and play,’ but there is just so much complexity,” Cox explained. “We are bringing the simplicity.”

So fragmented is the road to a successful CTV campaign that Cox has his fair share of horror stories. One well know brand accidentally spent $1 million on CTV ads over just one weekend, simply by entering a few values incorrectly to a demand-side platform (DSP). “They aren’t getting their money back,” he warned.

Cox points to Netflix’s recent stall in subscriber growth as a sign that SVoD is in decline. While a landmark moment in OTT video, Faultline is hesitant to jump to such grand conclusions. The 0.09% loss in subscribers can be neatly drawn to sanctions on Russia, while our sister research wing Rethink TV forecasts that Netflix is still set for small growth in North America through to 2027.

Nonetheless, Cox says that as ad-supported streaming grows, platforms need to start treating ad tech and experiences with the same reverence that they treat content. “Platforms should have fewer ad pods, they should be highly targeted, and appear in low frequency,” Cox demanded.

Cox believes that fewer, better targeted ad pods are the way forward, as they deliver more yield from an advertisers spend compared to a traditional ‘spray and pray’ campaign. Strategus can get granular across its national US footprint, with targeting capabilities going from large DMAs down to certain ZIP codes.

Faultline could not resist alerting Cox and Porch to the persistent AVoD bee in our bonnet – the fact that most pure-play AVoD platforms still lack the premium content that premium advertisers desire. Cox says marketers should remove all assumptions about certain content being seen as ‘lesser’ when advertising. If targeting is done right, you will still reach who you need to get to.

In terms of inventory, with the forgivable exception of YouTube, the company serves all the big names in CTV advertising of Roku, Tubi, Peacock, Crackle Plus, Vevo, Twitch and Crunchyroll. “Curating great inventory is easy. We excel in data, analytics and attribution,” says Porch.