How (and Why) Connected TV Will Be Your Favorite Channel in 2021

Melissa McKay November 8, 2020

As the advertising market begins its recovery after a significant downturn earlier this year, many digital marketers are rushing to tried-and-true direct response channels to prove the value of their advertising dollars. Increased sales will carry success into the new year, but the approach isn’t sustainable.

Most of the time, attribution reporting credits paid search and other lower-funnel channels as the last touchpoint before a customer’s purchase, but these reports fail to show how upper-funnel persuasion tactics create the demand that leads to more new sales.

Faced with current problems like ad fraud and ad blockers and future challenges like the disappearance of third-party cookies, marketers will need to consider new ways to show results in 2021. To be successful in the future, marketers will need to focus more on top-of-the-funnel display advertising to generate demand, measure effectiveness, and recover the value that’s being lost by faulty lower-funnel measurement.

With that in mind, here are the main reasons Connected TV (CTV) and other upper-funnel display advertising tactics will deliver the most value for marketers in 2021.

Bottom-of-the-funnel measurement is flawed

Let’s face it: campaign measurement at the bottom of the funnel is broken. AdAge estimates $ 1 out of every $ 3 spent on pay-per-click is affected by ad fraud. Juniper Research reports that the approximate cost of ad fraud totaled $ 42 billion in 2019. Some research firms put this number even higher. Given all this wasted spend, it’s surprising to see lower-funnel media continue to come out on top in a marketer’s advertising mix.

But there’s more contributing to faulty measurement.

In today’s world, the source of truth for lower-funnel measurement comes from website analytics, ad serving technology, and walled garden platform data. Each one of these has flaws that will be exacerbated when web browsers block third-party cookies in the next few years.

These flaws include:

• Website analytics software like Google Analytics shows an incomplete path to purchase. Mediums like CTV rarely appear in any reports, even if a user turns to Google to investigate a brand after discovering it while streaming. In these instances, the direct source (Google) receives all the credit, and the display tactic goes unnoticed.
• Ad serving technology forgoes organic and traditional media measurement. It also relies on third-party cookies. With around 40% of third-party cookies having a lifespan of one day or less, its reports paint an incomplete picture.
• Many marketers are already turning to walled gardens such as Facebook and Amazon, and more will flock as third-party cookies become extinct in the next few years. Marketers relying on platform data gain advanced targeting capabilities, but their dependence leads to greater attribution issues as conversions are duplicated across platforms.

As these measurement issues come to light in 2021 with the continued rise of data privacy, third-party cookie removal, and reliance on walled gardens, we’re quickly approaching an inflection point where marketers will need to measure their effectiveness in new ways. It’s time to get comfortable with uncomfortable measurements. This is where display advertising delivers.

Display advertising drives the most success with effective measurement and adaptive tactics

While ad budgets took a hit earlier this year due to COVID-19, budgets are returning and consumer trends show us where to place ad spend. The usage of Internet-connected devices to stream videos has increased by nearly 100% since 2019. With the pandemic rapidly affecting consumer behavior, eMarketer recently adjusted its display spend forecast from 6.2% over the summer to nearly 10% growth by the end of the year, outpacing predicted growth of overall digital spend by more than 2%.

Clearly, more and more marketers are including display channels in their advertising mix — and for good reason. Targetability is a key advantage of upper-funnel tactics like CTV. But without the ability to effectively manage and measure a campaign’s performance, targeting capabilities carry little value.

For many marketers, this is a serious challenge because managing media at the top of the funnel looks a lot different than at the bottom of the funnel. You are, inherently, reaching someone that knows nothing about your brand. For that reason, you need to tactfully persuade your target audience, create memorable experiences, and evoke positive emotions in your display ads. Changing consumer sentiment doesn’t happen overnight, but once that demand is created, results will follow.

The most successful brands quantify the impact of display campaigns leading to more new sales. Here are the major ways they’re showing ROI:

• Implied attribution: gives credit to the correct brand message by making geographic and time-series-based comparisons
• Lift testing: provides insight into the effectiveness of a brand’s message through control experiments
• Correlation analysis: uncovers directional trends by overlaying multiple data sources

None of these approaches are easy, but they prevent relying on incorrect lower-funnel measurements to show results and give you an accurate view of your marketing effectiveness.

Let consumer trends decide on the mix that’s right for you

Consider some of today’s most successful retail startups like Hello Fresh, Casper, and Billie. These brands tested into uncertain ad formats like podcasts, radio, and CTV and created demand for their products in competitive markets. They didn’t burst into the scene overnight; instead, they allowed consumer trends to decide what media mix worked for them.

By leaning into hard-to-measure display tactics like CTV, you’ll find less competition, drive greater ROI, and eventually come to accept that non-attributable mediums are our future. If you’re already tuned into the right channels, it won’t matter.

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