Advertisers Are Following Audiences to Safety and Performance

December 17, 2020

By Todd Wooten

PureSolution/Shutterstock.com

Life is changing inside ad tech, fast. Device IDs and third-party cookies are going away. Anti-trust lawsuits are here. And regulation is brewing, although it’s too early to tell what that regulation will ultimately look like. None of this uncertainty is good for advertisers, which is why their flight to safety is accelerating two long-running trends: the rise of in-app brand advertising and CTV adoption.

 

Audiences Lead the Way

U.S. adults spend 4 hours per day, on average, on their mobile devices, according to eMarketer. The bulk of that time (3.5 hours) is spent in-app. Meanwhile, U.S. CTV viewership jumped from 183 million last year to 209 million this year, according to the same eMarketer report. None of this should come as a surprise to marketers. We’re consumers too, and so we know that our phones have become extensions of our hands, and our television screens are increasingly seen as connected devices. But the data bears repeating because we’ve reached the point where marketers can no longer afford to make incremental concessions to seismic shifts in audience behavior.

Why is that the case? Simply put, the pandemic has accelerated the trends we already knew about. Instead of a multi-year horizon for adaptation, marketers need to think in terms of the next quarter. That’s certainly a challenge given the fact that the pandemic has thrown next year’s advertising budgets for a loop. But that disruption only underscores the need for advertisers to follow audiences. After all, with limited resources, advertisers can’t afford to spend money in areas where audiences are shrinking and performance is difficult to measure, let alone drive. Instead, marketers need to accelerate their strategies to keep pace with the accelerating shifts in audience behavior.

 

Why In-App and CTV Are Bright Spots for Advertisers

Over the past decade, media planners have consistently sought transparency, security from fraud, and better measurement. But achieving those goals hasn’t been uniform across channels. Consider the experience with both mobile apps and CTV.

Mobile apps are controlled environments that ensure a better user experience than desktop or mobile web due to their development environments, which are set according to the platforms. In addition, advertisers and app developers now reap the benefit from years of IAB initiatives to increase transparency, eliminate fraud, and deliver better measurement standards.

CTV also has an exciting story to tell. Like in-app, CTV is also a stable environment, which makes it relatively straightforward. The challenge for CTV is that it’s still relatively new. Remember, the iPhone debuted 13 years ago! CTV, on the other hand, only began to attract serious advertiser interest within the last two years or so. As a result, CTV measurement, transparency, and anti-fraud measures are works in progress, although the channel is clearly heading in the right direction.

But step back for a moment and consider the larger picture. Compared to the chaos elsewhere in digital and the decline of legacy media, mobile in-app and CTV represent a flight to safety as well as performance. It’s not a question of one channel or the other, but rather a matter of understanding that both channels are the future, even if the future isn’t equally distributed.

 

The Long View: Context Is Coming Back

As ad tech grapples with new privacy rules, contextual solutions have re-emerged. In a sense, what’s old is new again. Without third-party cookies and device IDs, context becomes a beacon for measurement and targeting. But not all contexts are the same.

Finding context for mobile In-app and CTV can be a straightforward proposition because we’re talking about controlled environments with defined standards and high barriers to entry. The same can’t be said for the open Web or its mobile counterpart. In fact, context will only become more challenging without third-party cookies.

Ultimately, ad tech is in the process of solving the context challenge everywhere. But that will take years. In the meantime, advertisers should promote new context capabilities in environments they’ve already begun to embrace for safety and performance reasons. Because while context may not be the reason advertisers choose to invest in CTV and In-app today, it will likely be the payoff at the end of the evolution that’s currently reshaping ad tech. The question, therefore, is not what the future will look like, but how wholeheartedly can marketers lean into the future today?

Todd Wooten is founder and president of VRTCAL.


The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.


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