Digital video options are abundant, but the ad experience often disappoints with low quality and repetition. While CTV offers potential advantages, reality falls short, especially in the US. Viewers dislike seeing irrelevant, repetitive ads lacking context. A solution to enhance CTV advertising lies in leveraging retail media, a rapidly growing marketing strategy. Retail media can address the challenges of CTV, providing a more engaging and relevant advertising experience for viewers.

CTV advertising is broken

CTV advertising faces growth but lags behind traditional TV spending. In 2023, US advertisers invest $25 billion in CTV compared to $86 billion in TV overall. Advertisers hesitate due to the vast CTV ecosystem, featuring over 1,400 FAST channels and potential low-quality content. Audience annoyance arises from repetitive and un-skippable ads, exacerbating frequency issues. The interruptive nature of ad breaks on some platforms adds to the challenges. Improved strategies are needed to enhance CTV advertising effectiveness and address current drawbacks.

Retail media enhances the worth of CTV inventory.

• CTV and retail media create a powerful partnership to address advertising challenges and offer unique audience engagement opportunities.
• Advertisers are increasingly interested in allocating CTV ad spend through retail media networks (RMNs), signaling a shift in media buying strategies.
• The collaboration between Roku and Walmart exemplifies the intertwining of CTV and retail media markets.
• Partnerships involve connecting RMN retail segments, encompassing buyer preferences and transaction details, to CTV viewership data.
• Brands and agencies can purchase CTV inventory enriched by RMN data off the shelf or refine target segments using their own first-party data.
• RMNs, while not primarily selling CTV inventory, focus on owned and operated inventory across mobile, online, and in-store platforms.
• Working with an RMN provides brands the advantage of defining a retail-specific audience, leveraging RMN’s partnerships with publishers and CTV partners.
• This approach grants brand marketers unique access to comprehensive measurement data, allowing assessment of campaign performance against retail-specific audience segments.
• The RMN utilizes its relationship with the CTV platform to provide metrics on campaign performance across owned and operated inventory and affiliate inventory from CTV partners.

Retail media can help CTV fix ad-quality issues.

Advertisers seek enhanced targeting and reliable measurement—achieved through retail media and CTV synergy. Increased CTV budget allocation via retail media partners enhances ad quality. Targeting is refined with viewership, RMN, and brand first-party data. Improved campaign measurement empowers marketers to optimize creatives for desired outcomes. Shoppable ads, exemplified by Roku-Walmart, transcend linear TV advertising experiences.

Vision of the future

CTV and RMN partnerships may surge as industries adapt to a first-party landscape. Media firms can leverage RMNs to craft ad platforms aligning with content quality, elevating viewer experience. CTV platforms, delivering audience-centric media solutions, optimize collaborations with retailers and brands, amplifying derived value. This trajectory promises to fulfill the potential of CTV advertising.