Editor’s Note: This guest post was contributed by David Fabbri, Chief Strategy Officer at LoSasso Integrated Marketing.

Major disruptions to the traditional television ecosystem have dramatically changed the way millions of people are accessing and viewing TV programs. Connected TV (CTV) is a fast-moving trend that continues to accelerate. Consumers are cutting the cord on traditional cable and satellite providers, opting instead to get their TV programming from streaming services via devices like Roku, Amazon Fire Stick or internet-connected Smart TVs. Perhaps even more exciting is that while CTV is great for consumers, it’s also creating game-changing opportunities for B2B marketers.

An Expanding Market

The good news for consumers is that they are getting more for less—expanding their programming options and viewing flexibility while decreasing their overall cost. As more people have made the change, awareness has grown, leading to more rapid adoption. In 2021, CTV in the U.S. is expected to reach 212 million people in over 107 million households. This corresponds to more than 60% of the U.S. population and 80.2% household penetration, according to eMarketer.

A Viable Option for B2B

The great news for B2B marketers is that the technology and advertising ecosystem that has evolved to support the new connected TV platforms includes new inventory; sophisticated, data-rich, digital targeting options; and enhanced buying flexibility. This makes a channel that was once ineffective and cost-prohibitive for most B2B advertisers into a viable option for the B2B integrated marketing mix.

Interested, but skeptical

When you talk with B2B marketers—both at agencies and on the client side—the majority are intrigued by the idea of being able to leverage the impact of TV in their integrated media mix. But, with smaller budgets and sharper focus on performance, B2B marketers always bring a healthy dose of skepticism to the conversation. Advertising on CTV sounds pretty good to them … but there are a few questions they are going to need answered.

In a recent post on the LoSasso blog, we covered top-level concepts around the important opportunity CTV represents for B2B advertisers. In this post, we’ll focus on answers to some of the more detailed questions that pop up when B2B marketers start to take a closer look—to better understand and evaluate the opportunity CTV presents.

TV wasn’t a good fit for B2B advertisers in the past. How is CTV different?

A traditional medium meets modern targeting

There are a number of important ways that CTV is changing the game for B2B marketers. One big difference is its robust digital targeting capabilities. In the past, television was bought nationally or in spot markets using published audience ratings. The ratings told media planners which programs or dayparts had the largest number of the people they were trying to reach. The problem was, the ratings were not very granular. You could target men 25-54, but you didn’t have much more detail than that. You could try to narrow your focus to a B2B audience by using specific programming, such as targeting a business network like Bloomberg, but because all people watching a program saw the same ads, you couldn’t selectively deliver your message to a specific subset of those people. As a B2B advertiser, if you were trying to reach people in key roles at specific types of companies in a particular industry, you might be able to get in front of them buying this way, but you’d also be paying on a CPM basis to reach many thousands of other people who didn’t fall into your target audience. All that waste meant that for most B2B marketers, TV was simply not a viable option. But with CTV, you can do just that—buying a very specific niche audience rather than a market, channel or specific program.

CTV Bought with Digital DSPs

Unlike traditional television, CTV targeting is much more like the targeting done for other digital advertising. In fact, many of the same DSPs that companies or their agencies currently use to place digital ads online—like The Trade Desk or Roku’s OneView DSP—include the ability to use similar targeting techniques to plan and place CTV ads.  As with other digital advertising, your ad can be delivered to a very well-defined target audience. You are not simply buying an ad placement where you hope your target audience will be watching.

Different Ads for Different Eyes

Similar to other digital media placements, CTV platforms allow ads that are seen within a particular program to be different based on who is watching. That means as an advertiser, you don’t have to pay to put your ads in front of people you’re not interested in reaching. Your ad only shows when your target is watching. And while CTV CPMs can be much higher than traditional TV, the audience waste that is removed more than makes up for the increased per-thousand rates. This makes CTV much more affordable, drastically reduces the budget needed to include TV in your mix, and greatly increases your ability to make an impact.

I am trying to reach a specific business target—how am I able target them on their TV at home?

Identity graphs tie it all together

An identity graph, or ID graph, is a sophisticated database used to collect and connect information to help build and refine profiles for individual people. The goal of an ID graph is to most effectively identify and link associated demographic and firmographic information, online activity, media consumption, device usage, purchase behavior and location data into individual identity profiles to allow for more accurate audience segmentation, targeting and personalization of ads and content.

Of course, this is no easy task. In fact, it’s quite complicated. Different companies have access to different data and use different techniques to make the connections that define each individual in their graph. Using a combination of deterministic methods (when an individual identity is “known” because of specific platform logins or other identifiable activity) and probabilistic methods (where an identity can be inferred based on connecting other data points) identity graphs continually stitch together disparate pieces of information into user profiles and refine them over time

This is done using any first-party data the company creating the ID graph has access to, as well as other third-party data that is purchased or gathered through partnerships and agreements with other data providers to supplement and make their ID graph more robust and accurate. The better the identity graph, the more effectively marketers are able to reach target consumers with personalized information across channels and devices.

How accurate is the data? How granular can you be with targeting?

In addition to what is baked into the identity graphs of various DSPs, data from other well-known third-party data providers—companies like LiveRamp and Axciom—is typically available on a CPM basis to enhance targeting and planning. You can get very granular with this information. For instance, an advertiser could target engineers at medical device companies in Seattle. Of course, while more data means more accuracy, better targeting and increased effectiveness, the increased cost can also quickly eat up budget and undermine overall performance. There is always a balancing act between adding data and keeping CPMs in a reasonable range.

How much do I have to spend to run an effective CTV campaign?

The simple answer is, it depends. Like any other channel in your mix, the budget needed to be effective depends on what you are trying to accomplish. That said, because you are able to make impression-based buys using detailed audience targeting, the budget threshold to buy premium TV inventory is much lower than it was in the past.

CTV also has high flexibility for changes and cancellations. This can be a lifesaver, especially in a year like 2020 when the business environment in a particular industry or geographical market can change drastically with changes to the “open” or “closed” status of a particular region. And flexibility to make changes on the fly means performance marketers can optimize targeting, timing and messaging based on results

Can I place ads in premium programming or is CTV inventory just remnant time that networks couldn’t sell?

The CTV advertising landscape is complex and keeps evolving, but the simple answer is yes, CTV inventory is available across a wide array of premium networks and programming—on live TV and in on-demand programming. Below is an example of some of the channels available on the Sling platform.

Is now the time to test CTV?

Many companies are looking at the disruption of 2020 as an opportunity to pause and evaluate how to move their marketing forward more effectively. Testing a dynamic new media opportunity that can give B2B marketers a way to standout and make a big impact seems to make a lot of sense. As the market matures and more companies take advantage of CTV, inventory availability will likely tighten—potentially driving up costs. But, while adoption is accelerating, for B2B brands, this is still the front of the curve. Right now, there is a clear advantage to getting in and being an early adopter. With the reduced cost and high flexibility of CTV, the associated risks are low. If you are looking to mix it up in 2021, CTV could be a great addition to your mix.

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