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  • Writer's pictureTPA Digital

What role will Connected TV play in post-cookie deprecation?

For more than a decade, digital advertisers have been using cookies to target customers and have been able to measure and track the user journey through to a conversion. Allegedly, it is one of the most measurable channels. ROAS (return-on-ad-spend) is a metric used to illustrate how much is being returned to the business from the advertising spend.

In comparison, TV has always been a reach channel that gains scale across broad audiences. TV is widely accepted as one of the best channels for branding. Further, the rise of non-linear TV changes the traditional medium of TV and how advertisers procure ad space.

The cookie deprecation in 2023 is a challenge for all advertisers. However, it’s time the industry updated its targeting, given the cookie was created in 1994. It’s going to be a massive shift for the industry and there will be a period of uncertainty as advertisers understand how to update their media plans. As the cookie crumbles, the emerging channel of CTV will take a piece of media plans as it merges the best parts of digital and targeting with the reach of TV. Connected TV does not rely on cookies to facilitate targeting but was built to target customers based on data and IDs, so the removal of the cookie has no impact on this channel.

What is Connected TV?

Connected TV (CTV) refers to content that is streamed through apps on a TV and is connected to the internet, ads can be served before content or during commercial breaks. Connected TV allows you to capture those audiences that aren’t watching traditional TV, which is in decline with 27% of people planning to ‘cut the cord’ (end traditional TV subscriptions) in 2021.

How does Connected TV work?

Connected TV is able to personalise ads based on first-party identifiers such as device IDs and advertising IDs or through probabilistic data to reach consumers on connected devices. An example might be altering an advert based on the user’s previous behaviours or their location. These identifiers comply with new privacy goals and allow users to manage their preferences. This keeps the user at the centre of these decisions the whole time.

Advertisers can target audiences on connected TV with their own proprietary first-party data to find their existing audiences, third-party audiences or publisher data to allow them to scale and find new audiences.

Are markets outside the USA ready for Connected TV?

Connected TV has reached maturity in the USA. According to Nielsen, 92% of adults aged 18-49 live in homes with CTV access. Further, as reported by Samsung’s internal estimates, 63% of all time spent on TV is now spent streaming. Within this, approximately 80 minutes per day includes the streaming of ad-supported content. However, this looks purely at the US, where CTV is more mature and part of a fragmented landscape.

In Europe, the landscape is slightly different, as there are some local broadcasters (such as Channel 4 and Sky) who dominate the market. Therefore, this suggests a slower expansion compared to the US. However, the market is already starting to gain traction. In the last decade, VOD revenues have increased from €2.1 million to €9.7 billion, driven by international platforms like Netflix, Apple TV+ and HBO. Local streaming services like Turkcell and Now TV are keeping pace by expanding their share of the European market. UK and Germany have the highest rates of CTV penetration, with 40% of households owning at least one CTV device. Due to the domination of the local broadcasters, CTV should e viewed as a complement to traditional TV and not a replacement.

Through a leading UK DSP, there are around 23 million impressions available per day on a connected TV device. However, the majority skews towards the top 5 apps.

What will your media plans look like post-cookie deprecation? Will you be running more activity through connected TV? Still trying to understand what you need to do? Contact Us.

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