Why CTV is Positioned to Thrive as Third-Party Cookies Fade Away

Why CTV is Positioned to Thrive as Third-Party Cookies Fade Away

Throughout the past quarter century, digital advertising was touted for its ability to target ads and directly track results.

By contrast, traditional TV was valued for its broad reach and contextual intensity. TV promised a powerful ad experience due to the power of its programming. Targeting and measurement…not as much.

Now, as digital advertisers’ third-party cookies are crumbling, “television”— especially connected TV — and its advertisers are sitting pretty in a new world led by first-party data.

Backlit in a hero shot

As advertising adjusts to a world without third-party cookies, what increases is the importance of media and measurement partners — or even entire ecosystems — that can provide targeting and insights for their clients.

Connected TV (CTV) is emerging as one such ecosystem. The personalized ads in the CTV ecosystem run on proprietary, or “first-party data” identifiers (device IDs or advertising IDs), to reach consumers on smart TVs.

Players in the CTV space follow both new privacy laws as well as industry recommendations from the IAB. One goal of identifiers is to comply with these laws, enabling the consumer to share preferences.

Since CTV identifiers (device IDs or advertising IDs) are still a form of regulated personal information, how they are used is crucial. For example, at Samsung we require that the consumers opt in to receive targeted ads on their Smart TVs when they set up their TV. This consumer-centric approach allows viewers to choose their settings and manage their privacy preferences at any time. The video ads experience can therefore be customized using the first-party data attached to that identifier.

If this were a TV drama, now is the moment when CTV steps through the door, backlit in a hero shot.

Scale without cookies

Without the massive adoption of streaming in the past year, CTV’s identity developments might have been nothing more than a technical subplot in the narrative about the deprecation of cookies.

But connected TV has reached maturity. Ninety-two percent of adults ages 18-49 live in homes with CTV access, according to Nielsen. According to Samsung’s internal estimates, 63% of all time spent on TV is now spent in streaming; and approximately 80 minutes per day is spent with ad-supported streaming content.

Connected TV has become a scalable medium for ads. And it has never relied on cookies.

Three ways to grow

So, how can first-party CTV data help advertisers drive growth?

First, the data can help advertisers find their target audience more efficiently.  Matching first-party CTV data with advertiser audience data as well as third-party data allows advertisers to find their audiences the way that they want—and to communicate with those audiences at scale.

Second, by using insights about how people watch linear and stream content, advertisers can avoid waste. For instance, by not serving too many ads to too few people across linear and CTV environments. The flip side is that consumers get a better experience.

Third, by measuring the impact of their advertising.  Exposure to a TV ad—on linear and CTV—can be matched to sales data to determine how many new sales were generated by TV ads.

More efficient and more measurable advertising makes television advertising more accountable, and that is a recipe for growth.

The irony that television advertising began as a broad-brush, contextual approach to ads, and is now a leader in targeting and measurement, is a plot reversal that would delight any TV writers’ room.