Unlocking Contextual Targeting Opportunities on CTV

March 21, 2024

As seen on Streaming Media

TV is being digitized at an interesting time on the digital advertising timeline. Just as advertisers are able to target audiences on the big screen, their favorite approach - third party cookies - are going away. This is inconvenient, but it’s also a catalyst to force advertisers to test and perfect other targeting methodologies on CTV. One of the most promising is contextual targeting.

Consumers have been wary of behaviorally targeted ads as long as they’ve been used. They’re much more comfortable with contextual ads, which don’t rely on consumer data, and don’t feel as invasive, especially on the big screen. Contextual on CTV also makes more sense at the household level. While a behaviorally targeted ad works well if someone is streaming on their mobile device, the content on the TV in the living room may be seen by multiple people. A behaviorally targeted ad might only apply to one person, while contextual targeting could be much more relevant to a group.

What’s more, contextual targeting on CTV provides value in a number of ways. First, contextual targeting captures attention and performs better with audiences. Contextual also helps with brand safety and suitability compared to audience targeting or meta data targeting. A brand can ensure that they’re aligning with content that makes sense for their brand because that’s exactly what they are focused on with their targeting. 

Challenges are Short-Sighted

Contextual CTV is still new, and there are plenty of reasons that advertisers are hesitant. Without standard content identifiers, advertisers have trouble managing a contextual media buy across partners and comparing the outcomes. The IAB and Iris are working on fixing that, but other contextual CTV players will need to follow the standards for it to work. What’s more, brand safety and suitability isn’t as effective without access to a full show’s content. Some brands might want to stay away from a show with adult themes entirely, but another brand may just need to ensure they’re shown during the right commercial break. An hour long program could have forty five minutes of positive content that is valuable from a contextual standpoint, but have a murder scene with a commercial break right after it that some brands would want to avoid. 

Advertisers are also limited in their ability to analyze video content in depth, the way they can do on the open web. Publishers have a lock on their content, and limit access through direct integrations, which slows down progress. This makes it hard for advertisers to get smarter. Publishers are trying to protect the prices they charge for their content, and don’t want advertisers to cherry pick, but there can be a compromise. 

Innovation Will Make Contextual CTV Advertising Even Better

A lot has been said about the challenges of getting contextual targeting to work at scale on CTV, but some of the issues are actually a result of people thinking about CTV as an extension of display, rather than a new channel with entirely new opportunities. Publishers should be more open to innovation and negotiation with advertisers. To date, CTV, especially quality CTV is in high demand, which means that publishers can work more collaboratively with advertisers on a fair compromise. 

Digital advertising has always innovated over, around and through hurdles, and CTV will be no different. New AI technology and attention metrics are providing alternative angles that could clear some hurdles entirely.  AI presents opportunities to create much more effective contextual targeting. One study found that contextual targeting enabled by AI performs 4x better than a control. Contextual targeting is already being transformed on the web, and next gen AI is the primary catalyst. Contextual solutions using generative AI are emerging that enable significantly more nuanced targeting capabilities compared to keywords or URLs. 

There are other exciting contextual advancements that show just how creative advertisers can get with contextual advertising on CTV. Virtual Product Placement uses AI to select the perfect scene to digital add products. One early study found that even sad or disgusting scenes can work very well contextually for certain brands. Another advancement is “direct-to-glass” which allows advertisers to show display ads throughout the viewing experience, which gives contextual a whole new meaning. An ad for a truck could render in the search results for action-adventure movies, or a fashion ad could be shown next to results for Real Housewives. 

These innovations show just how much third party cookies have limited creativity in media buying. The promise of digitizing the big screen doesn’t have to be limited to targeting audiences while they watch TV. Contextual targeting on CTV provides a totally blue ocean opportunity for brands to explore.