Measurement Is Key to Make Streaming TV Ad Revenue Grow Even Faster

The ecosystem of streaming television is going to continue its surge this year, with premium programmers like Max, Disney+, Peacock, Amazon Prime Video and others collectively growing 13% to $10 billion in ad revenue, according to Interpublic Group’s investment arm Magna.

But while this creates a host of new advertising opportunities for marketers, dozens of challenger brands like Roku and Telly and are also trying to capitalize by entering the nascent streaming space, which has led to a variety of headaches for consumers and advertisers alike.

The path forward for both groups lies in aggregating content and standardizing key processes, like measurement, according to Rose McGovern, head of programmatic and digital ad sales at DirecTV.

According to McGovern, who addressed marketers at the Possible advertising conference in Miami, the advertising community has long understood that many of the issues slowing the growth of CTV revolve around standardization: of measurement currencies, of audience accessibility and of ad formats.

But too few marketers have realized that the same fragmentation issues dramatically affect the consumer experience. By working to address these issues, consumers will respond with greater ad engagement, more time spent on streaming services and less churn.

“We’re aggregating the content, and we’re making it searchable and easy to find for viewers,” McGovern said. “But you need to do the same thing for advertisers. There needs to be standardization around targetable content and targetable audiences across platforms so we can control for reach and frequency.”

More engaged audiences

According to consumer data collected by DirecTV, many of the factors that viewers cite for canceling subscriptions or ending their viewer sessions stem from fragmentation.

The primary reasons consumers abandon a service include price, reliability, product offering and video quality. When asked what challenges consumers encounter when watching multiple services, respondents cited content discovery, video quality, content variety, ad frequency and hidden costs.

These issues arise because different streaming services use different site layouts, ad formats and technology. The lack of standardization can frustrate consumers, leading them to stop watching or unsubscribe altogether.

These same issues—lack of standardization and aggregation—also make marketers’ jobs harder. Without a common currency for measurement or clear data to compare campaigns across platforms, brands have trouble buying, measuring and ultimately optimizing their campaigns.

However, data from DirecTV found that viewers experiencing relevant, timely and consistent ads engage more actively with the campaigns, according to McGovern. So once the industry is able to address its fragmentation problem, everyone will benefit.

“We’re in a place where, as an industry, we have the tools to do that—it’s just about enabling and implementing,” McGovern said. “I think by 2025, we’re going to see all these things come together and take off.”