Sailing the Seven “Cs” of CTV 2.0
At the dawn of CTV in 2017, traditional linear TV ad spend was seventy times greater than “programmatic TV advertising,” while “CTV” was not even a category to be measured on a forecast. In less than eight years, CTV has grown exponentially. Today, CTV ad spending accounts for one-third of total TV ad spending and is still growing quickly.
In that time, we have sailed from CTV 0.1 to CTV 1.0, where the power and precision of programmatic and the reach and measurement of brand TV have been infused into this new channel. CTV 1.0 advertising has robust technology including targeting, data, and a thriving open ecosystem, where ad pods and yield optimization are core. The FAST model and AVOD like Disney+, Max, and NBCU have grown impressions significantly, creating a surge in scale to hundreds of millions of ad subscribers. We are in a scenario where the scale of broadcast TV is coming more rapidly to digital on the big screen.
CTV 2.0 Paves the Way for New Opportunities
Now that CTV is a mature ad market, expectations are higher across advertisers, publishers, agencies and tech companies to improve upon TV and digital advertising norms of the past. We’re on the cusp of CTV 2.0. Consumers want more relevance with privacy, publishers want better monetization, and advertisers want transparent, meaningful outcomes like measurable retail sales and foot traffic.
I’ve outlined “Seven Cs” that are emblematic of the shift we need to make as an industry to realize the potential and power of CTV, grow the market and be able to delight consumers. Many of these elements are intertwined, emphasizing the importance of everyone in the industry working together to achieve the next level of CTV:
- Context
- 1.0 - Context was based on meta-data from a “dumb” video stream. A piece of content was a “blob” with metadata attached to it that couldn’t be penetrated.
- 2.0 - Advertisers, ad tech partners and publishers need to know what’s happening in the CTV stream at a deep level. Elements like people, places, objects, scenes, products, sentiment, categories, and taxonomies need to be available as real-time data. Importantly, contextual metadata should be time-based to understand a stream at any given moment.
- Commerce
- 1.0 - Few ads focused on commerce, action, or conversion. Experiments with interactivity or QR codes yielded engagement but scale was limited.
- 2.0 - Dynamically generated CTV product ads are more common and focus is shifting to engagement and conversion on the big screen. For CTV commerce to mature, product data matters more than ever so mastering the art of the product catalog in this context is critical. CTV ads can be generated with thousands of variations based on specific products from a product catalog, each linked to inventory and local availability to ensure purchase.
- Content
- 1.0 - Ads lived mostly outside of content and did not reference content
- 2.0 - Content and ads start to blend to create a more seamless experience. Ads can be dynamically rendered into a stream with products or brand images placed directly within content. New formats gaining popularity integrate ads and content such as overlays where publishers squeeze back video and wrap it with static or dynamic creatives. Products can be bought at specific points within a stream using a remote or app, where shoppable video blends content with relevant commerce.
- Creative
- 1.0 - CTV largely followed linear TV commercial legacy featuring fixed creative assets that everyone sees, with standard 15- or 30- second ad breaks from high end production studios.
- 2.0 Now creatives can be rendered dynamically, customized to the stream context or personalized to the user based on geo, gender, behavior and matched-to-product information. With generative AI, creatives can be produced at lower cost quickly, with CTV advertising democratized and far more accessible to businesses of all sizes.
- Carbon
- 1.0 - CTV ad delivery was not broken out separately in carbon footprint calculations because it was neither TV or digital, but something in between.
- 2.0 - CTV as the largest growth format and a major carbon user becomes a key focus of carbon reduction for publishers, advertisers and tech companies. Research shows that high-quality ads like CTV reduce emissions for advertisers, which could drive additional demand, but that doesn’t mean CTV is carbon neutral. The good news is new standards to help reduce CTVs carbon footprint including OpenRTB 2.6, with an ad pod object that can lower emissions for programmatic. A group of companies (Samsung, Amazon, Microsoft, Carbon Trust) are working on a methodology for measurement and reduction of carbon from Connected Devices. Netflix has a goal to reduce CO2 for high end content production.
- Concurrency
- 1.0 - Much of CTV was on-demand streaming which meant that there wasn’t a “prime time” surge of viewership for streamers to contend with.
- 2.0 - As more streamers buy rights to live sports, streaming to millions of people at the same time becomes a bigger challenge (like pixelation for the Tyson/Paul fight). Streamers and ad tech partners need to scale server side ad insertion capabilities to handle larger numbers of users. The Christmas Day NFL game had 27 million users watching and millions tapped into NBC Olympics streams. To handle this is a new industry challenge with the need to support high concurrent usage and ultra low latency for ad requests.
- Capability
- 1.0 - Knowing how capable CTV was for performance vs. other marketing channels was a challenge, Proxy metrics like video completion and viewability were the norm.
- 2.0 - CTV advertisers are focused on measuring business outcomes like ROI, sales, footfall, and tune-in driven by their ads. It’s about measurable incremental lift in meaningful action where CTV is transforming into a performance channel.
As CTV takes a larger share of media spend and content consumption, it is key to work closely across advertisers, CTV publishers, and standard bodies to make sure the industry can move beyond CTV 1.0. At the start of 2025, there are still some operating purely in a CTV 1.0 mindset, yet there is a need to prepare for these new capabilities to create more value to the ecosystem.
Achieving CTV 2.0 is possible, but we all need to recognize the opportunity, chart out a roadmap to enable it, and make it so. Ideally the “Seven Cs of CTV” become a call to action that unites us as we work to make CTV even better for all stakeholders. Sail away!
[Editor's note: This is a contributed article from Kargo. Streaming Media accepts vendor bylines based solely on their value to our readers.]
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