Simplifying the road to convergence in TV

Convergence trends

One of the hottest topics in the media world right now is convergence in the video content market.

From traditional linear TV to streaming via Connected TV devices and the potential for marketeers in Advanced TV, there is a lot going on.

So Mike Butler, Agency Lead, Northern Europe at Xandr, AT&T’s advanced advertising company, takes a deep dive into the box, whatever it’s shape is…

Mike Butler, xandr - mediashotz
Mike Butler, Agency Lead, Northern Europe, Xandr.

It’s the golden age of premium video content for viewers, and the height of complexity for advertising decision-makers and their partners. 

With the pandemic accelerating many consumer trends, including the adoption of emerging formats such as connected TV (CTV) advertisers need to understand how to reach, scale and measure their new audience. 

As ever, where consumer behaviour leads, advertising dollars follow shortly after. 

Advertising spend on CTV  increased by 22% in 2020 and is estimated to increase to $18.29 billion by 2024. 

But, while the opportunities for digital video are abundant, this nascent format is not without its challenges, with knowing how to navigate a fragmented landscape effectively being a top priority for advertisers. 

This navigation ability is a pre-requisite to what many see as an end goal for unified planning: convergence.

Xandr’s recently released ‘State of Convergence and Advanced TV’ report which surveyed 357 OTT and video buyers found that one-in-four buyers have yet to even research convergence. 

But, with a holistic oversight to all campaign activity key to a successful advertising strategy, how can advertisers navigate the complexities of advanced TV and the convergence of video?

What’s on the box and which box are you watching it on?

What is ‘convergence’?

While the concept of convergence has been discussed in the industry for some time, part of the challenge in successfully leveraging it is the difficulty in defining it. 

The 2021 State of Convergence and Advanced TV study defined convergence as ‘the ability (or desired ability) for advertisers to plan, buy, execute, or measure campaigns that include more than one type of TV or video inventory.’  

This means that those three out of four buyers that are already executing convergence will have a distinct advantage.

As new video formats such as data-driven linear (DDL) TV, OTT/CTV and addressable are gaining momentum across the globe (as ever, led by the US), convergence will continue to become crucial to buyers. 

This increased investment in data-driven video comes from buyers’ desire for enhanced targeting and scale, which are some of the main benefits when compared to linear TV advertising. 

Finding the path to convergence

While the introduction of emerging video formats and channels creates new possibilities for advertisers it has also created a fragmented marketplace. 

With the average Brit having access to more than nine connected devices, this variety creates a disjointed view of the campaign and generates a plethora of possible trading formats. 

Yet, the state of the marketplace is not the only challenge buyers face. 

In a recent report advertisers listed several internal roadblocks to convergence from, “a lack of understanding” among internal and external clients to “breaking through existing organisational silos,” and “stakeholders caught up in category thinking.” 

This is exacerbated in the UK where the ad-funded CTV propositions do not have such a strong position (or ability to scale) as they do in the US. 

ctv and the future - mediashotz - Image by Marketing-ASS from Pixabay
Brits are connected to many more than one device for video in their homes.

This is in tandem to stakeholders making plays to control more of the CTV supply chain, for example, OTT providers making TVs or broadcasters building their own direct to consumer (DTC) play. 

Advertisers also listed building and growing relationships with publishers and the less familiar advertising process as key challenges to programmatic OTT/CTV. 

But convergence offers a more holistic approach to finding targeted scale among video audiences with its ability to enhance every aspect of the campaign process including buying, planning, campaign activation and in-flight optimisation.

The benefits of convergence 

The majority of advertisers believe that the budgeting/planning and campaign activation phases are most in need of greater convergence. 

Once activated, convergence can help in-flight optimisation by a single update to be reflected across all placements as well as closing the loop on video campaigns and allowing buyers to truly show ROI. 

But while the idea is a simple one, executing on it is not.

With investment for addressable and OTT often spread across different budgets, advertisers recognise that a single budget for all TV and digital video is a key benefit of convergence. 

Future growth

With addressable TV now accounting for 3.3% of the UK’s ad spend and CTV spend set to soar over the next five years, the need for advertisers to achieve convergence will only increase. 

While advertising decision-makers globally are aware of many of the benefits of automation and video convergence, their level of adoption varies and it is here where we need to see more from everyone involved in the CTV advertising landscape.