A Deep Dive into Programmatic - Part 1 (CTV, OTT)
At first glance, Programmatic advertising may seem as complicated as trying to solve a Rubik’s Cube, understanding quantum mechanics, or even how Google works. But don’t fear, Granular is here!
We are departing on a five-part series of deep dives into the inner workings and magic of Programmatic advertising. This week is our maiden voyage, Part I, as Chris and Anna take a closer look at all things CTV & OTT.
Other Episodes in this Programmatic Digital Strategy Series
- Programmatic Ads Part 2 – Key Performance Indicators
- Programmatic Ads Part 3 – Out of Home Advertising
- Programmatic Ads Part 4 – Geofencing vs. Geoframing vs. Geotargeting
- Programmatic Ads Part 5 – Audio Advertising
What you need to know about CTV and OTT
Learn the basics of programmatic video advertising from the experts at Granular Marketing in part one of this podcast series. Find out more about the advantages and disadvantages of the main types of video ad distribution: Connected TV (CTV) and Over The Top (OTT). In this podcast we’ll discuss placement strategies, key performance indicators and much more.
CTV/OTT Programmatic Advertising Topics & Timestamps
- The basics of CTV and OTT (01:25)
- Real-world examples of CTV and OTT (03:12)
- CTV and OTT costs and placements (04:13)
- Gauging performance and KPI’s (06:30)
- Placement Strategy (08:14)
- Direct vs Trade Desk (9:30)
- What are the pros of CTV & OTT (10:30)
- Potential downsides to CTV & OTT (15:55)
- How does Traditional TV advertisement work within Programmatic (19:58)
- TL;DL – closing thoughts and the main takeaway (21:58)
Narrator: Welcome to Getting Granular, the podcast where digital marketing experts from the agency, Granular, talk about the latest trends, tried and true best practices and share their unfiltered thoughts about the industry. Whether you are here to learn how to grow your business, improve your digital skills, or just want to hear some Midwest PPC experts rant about digital media, you’ve come to the right place.
Chris: Thank you once again, for tuning into the Getting Granular Podcast. Once again, I am your host, Chris Cesar, senior manager of paid media here at Granular. And I am joined once again by Anna Borchert, a director of digital media here.
Anna: Thanks for having me, Chris. I’m excited to continue talking about what we’re talking about.
Chris: Yeah, absolutely. So anybody who’s listened to the podcast previously knows that we a few months back covered sort of an overview of programmatic advertising, what it is, a high level of what your options are, and different ways to potentially use them in your advertising. Today, we’re going to do a part one or a part two, depending how you classify that first overview of a sort of deep dive looking at here are our options for very specific options in that programmatic advertising. So today we’re going to be talking about over the top and connected TV, and the main differences for when you should use one or the other or both. So Anna let’s start off at the most basic level. CTV, connected TV, and OTT, over the top streaming are two things that you’ve probably explained to me what? Seven or eight different times.
Anna: Definitely more than that.
Chris: All right. That’s great. And I still struggle to understand these, so let’s start off with the basic of what each one of them is. So CTV.
The basics of CTV and OTT –
Anna: Yeah. So you kind of already explained what the acronym is. Programmatic advertising in general uses a lot of acronyms. So CTV, as Chris said, is connected TV. So folks in marketing or advertising clients may have heard that, but to the general public, like they don’t really know exactly what that is. You just think of the word TV and that’s basically what it is. So it’s going to be any kind of streaming content on your TV, if it’s a smart TV or a device like a Roku, Amazon Fire, Chromecast, et cetera. Whereas OTT, or over the top, it’s just going to be any sort of content that is delivered “over the top of a cable box” or over the internet.
Chris: So over the top, meaning, when you say over the top of a cable box?
Anna: It just basically means internet.
Chris: So it bypasses the cable box.
Anna: Yes. Because it’s over the interwebs.
Real-world examples of CTV and OTT
Chris: Okay. So then if I am watching say, the Olympics or a basketball game on my laptop, that is OTT?
Chris: Because CTV is only on the TV and anything else is OTT?
Anna: OTT. Yep. So basically, as it says in the name TV, CTV, on your television.
Chris: All right. I think I’m finally understanding this. So let’s sort of take that a step further and we sort of touched on it a little bit, but let’s look at these real world examples. So where and when can I use these, what industries are they relevant to? Let’s start there.
Anna: Pretty much anyone can benefit from CTV or OTT advertising. Commercials, TV advertising have been around for years upon years. So it’s really not changing anything except for how people stream content. I don’t know the exact percentage, but I was reading something a couple months ago about how people aren’t actually using traditional cable anymore. And everyone is subscribing to all the various channels and networks and everything else that’s out there. So it hasn’t changed much. That’s where, again, everyone can kind of benefit from it. It’s just how you use it because there’s going to be a lot of cost differences between just kind of an OTT and then a CTV placement.
CTV and OTT costs and placements
Chris: Okay. So you sort of mentioned the cost. Let’s talk a little bit more about that. What are the differences in costs? Does one make more sense to use if I have a smaller budget? Does one make sense if I have used a larger budget? Do you want to just explain that a little bit more?
Anna: Yeah. So kind of when it comes on to it, everything programmatically is bought via CPM (cost per mile). So when we look at OTT versus CTV, it’s going to be basically a lower CPM or a higher CPM. So OTT traditionally, again, it kind of depends on what you’re going after. But are usually like 15, $20 CPMs. A lot of the CTV placements, again, very variable, depending on premium placements, like Hulu are going to start more in like the 40 to $45 range. So of course, depending on what your budget is, how competitive the certain placements we go after are, if you choose CTV or OTT, that’s basically going to decide what kind of video advertising marketing plan you come up with.
Chris: So you sort of touched on the differences in CPM. Since the CPMs for CTV are going to be that my higher, is it safe to assume that, assuming money is no object, my performance is going to be better on CTV than OTT.
Anna: Yes and no. Because it really is going to depend on kind of what you go after. Because everything is basically handled via what’s called private marketplace deals or PMP deals. So you can choose a bundle, we’ll call it, of different placements. So you can kind of grab a bundle, if you’re attacking it that way for run of network or kind of everything. You can also choose specific placements and just go after Hulu, which of course, is a very competitive space. So that might not necessarily mean that you get unlimited views. You can also change your frequency. So it really comes down to creating a full fledged marketing plan for how you’re going to choose what content, what devices, potentially what shows when we can get it that specific.
Gauging performance and KPI’s with CTV/OTT
Chris: Okay. So then I guess to take that a step further when we talk about performance, what are the performance metrics that we are looking at to determine if something is a success or not? Because obviously I wouldn’t expect someone to fill out a lead generation form based on a TV ad they saw. There’s just a disconnect there. So what are the main KPIs that we’d be looking at to say, okay, this has been a successful campaign or we could do some things to improve it?
Anna: Yeah. So CTV, pretty similar to awareness or it is an awareness campaign primarily, but similar to audio campaigns, we’re not really going to see a lot of clicks from those. So on OTT where it’ll show up on your laptop, or your tablet, or your phone, we can see clicks off of those because it’ll either be in an app or native in like Safari or whatever full episode player someone might be watching. So from there you can see clicks. I still would not recommend that be kind of like a main KPI because we’re still not going to see a lot of those.
Now in terms of course, CTV, you don’t see clicks off of that. So kind of what you want to look at as a whole is how many videos were started? And then what that completion rate is? So that basically is kind of a bounce rate of the video for how many people watched the entire video and either make it to the next part of whatever they’re watching, or if they click out and bounce out? So traditionally like an 87% video completion rate is like, I’d say the standard from what I’ve seen for an OTT video. But CTV, since there’s not really anything you can click out of, it’s pretty much when people are just watching TV. That more so is like a 97, 98% completion rate. So those would be the main metrics, impressions, unique impressions, and then video completion rate that we would look at.
Placement Strategy for Programmatic Ads
Chris: Okay. So then let’s, I guess, talk about some potential placements of where … We sort of already touched on it. But where are the ideal places to be placing these video ads?
Anna: Yeah. So as a kind of reference, you can choose things in terms of like bundles. So depending on again, how you buy your placements programmatically, because you can go direct with advertisers or you can go through things like the Trade Desk or any other DSP, you can do these bundles. So again like a run of network kind of thing will basically just choose based on what you’re bidding for will be like “the best placement.” Some of the more specific ones you can choose would be live sport content. So like March Madness or NBA finals, for example. You can break it down to individual Roku channels as I kind of mentioned before. There’s a million different Roku channels out there. And then more specifically when you’re looking at the OTT side, choose specific websites like Buzzfeed, they’ve got tons of video content. That would be an example of one. So kind of everything, when you think about it. It’s really just how you are putting together your marketing plan for what might make sense, because not every advertiser is going to make sense to be in live sports.
Buying Programmatic: Direct vs Trade Desk
Chris: So you talked about the different ways that you could possibly purchase these ads, be it direct through the provider or through the Trade Desk. What I guess are sort of the reasons why I would, or wouldn’t want to do one or the other? What are the pros and cons of doing it direct versus through the Trade Desk, et cetera?
Anna: Yeah. So kind of one of those things which we talked about in our first or overview kind of programmatic is that a lot of programmatic is done using real time bidding. So it takes into account, the audience or kind of the placement that you’re going after. So instead of going direct, you can kind of hit multiple places with something like the Trade Desk where you can go after the bundles or the PMP deals, because then you have more options to hit people rather than just going direct where you’re only choosing that one placement.
What are the pros of CTV & OTT
Chris: Okay. So unless there’s anything else you wanted to add in about sort of the overview of the real world examples, I think it makes the most sense. Let’s go into pros, cons, what are potential downsides of each of them? So let’s obviously start with the pros.
Anna: Yeah. So the pros, compared to kind of like your traditional media, as I said, it’s giving you more options to go after certain things, especially since a lot of people are using connected TV devices, not necessarily, subscribing to traditional cable. You’re basically able to hit people who aren’t on normal TV. So that’s the main thing. And you can hit really premium placements. Hulu obviously is a very large part of the market when it comes to streaming TV or streaming content. And then there’s other … Obviously then there’s other placements like Pluto that you can hit that also have a lot of content that you’re not necessarily going to be able to hit via a more “traditional” video campaign or obviously something on YouTube.
Another benefit is that you can also layer in some of your first and then third party data. So if you have any sort of customer list, you can basically apply that to your campaign again, depending on how you buy.
Chris: In both CTV and TOT?
Anna: It will limit the audience obviously, but if you’re trying to hit some specific people, that’s kind of the way to do it.
Chris: Okay. Is there a minimum for that, of say of my CRM list, I need to have 3,000 people, 30,000 people, 3 million people?
Anna: I hate to answer this way, but it depends on the platform.
Chris: It’s always the best answer.
Anna: It’s true.
Chris: Okay. So then I guess let’s look at it the other way. You mentioned it will get a ton more people if we don’t limit ourselves to our customer list or our retargeting list. What is the potential audience? And obviously I think I may be up about to answer my own question here, but say I want to target the Super Bowl. 300 million people watch the Super Bowl. How many of those people could I reach with a CTV? Is it going to depend on how many people are watching via OTT?
Anna: Yep. So it’ll depend, and then again, kind of like how some of the buyers are, you can choose individual devices. So it’s like, are you trying to hit people across all of the devices, of like a Hulu or wherever? Or are you just trying to target people who have Apple TV or Roku or something like that? So in theory, yes, but also in theory, no, if that answers your question. Because it’s going to be all … I hate to say it. It’s all going to be dependent on how you choose it.
Chris: It depends is always the best answer.
Anna: Yeah. Unfortunately that seems to be my answer today.
Chris: Okay. So let’s focus a little bit more directly on CTV. What are the pros of … Why would I want to use CTV?
Anna: That’s really going to be when you’re trying to target premium placements and high level awareness. So people have always traditionally watched TV. That’s something where you can basically make sure to hit people when they’re not necessarily going to expect it if that makes sense, because you’re watching TV or they have it on the background, you’re watching a particular show, et cetera. So you’re really just hitting people when they’re going about their normal day.
Chris: Okay. So then what about OTT?
Anna: So pretty similar. You can reach a wide net of people. The one benefit of going OTT specifically is that you can hit people on they’re on websites as well. So if you only do kind of like a CTV campaign, then you’re missing out on people who are on Hulu on their phone or watching … I just realized that you can watch things on the Roku channel store on your phone if you have that app downloaded, as I do. It can basically increase your impression count since it opens up your reach to different things beyond just those smart TVs or smart devices.
Chris: Okay. So then I think … Let me know if I’m wrong here, but it would be safe to assume that in general, OTT is going to reach a larger audience than CTV?
Anna: If you are just using CTV and not including OTT, then yes. But if you’re targeting both, then obviously you’re have a greater net of people. Because for example, I don’t watch anything on my phone, laptop or computer. I’m pretty much exclusively watching stuff on my Chromecast.
Chris: You just told us you were watching stuff on your Roku app on your phone.
Anna: No I said I noticed that you can.
Chris: Oh, okay.
Anna: I was going to watch it. And then I was going to try to cast it, and then I learned I can’t cast it
Chris: Just keeping you on your toes.
Chris: Okay. And you did mention that it with OTT, one of the pros is also you can sometimes reach people on non-PMP deals.
Anna: Yeah. So you can pretty similar to like a display campaign, target specific websites and then exclude websites as well. And again, depending on how you buy, whether there’s like the Trade Desk or …
Chris: Okay. And explain PMP one more time.
Anna: Private marketplace deal, which are going to, again, kind of be like those bundles. You can kind of target everything Hulu, or everything Pluto, or everything within like arcs and entertainment, or et cetera.
Potential downsides to CTV & OTT Advertising
Chris: Okay, cool. So I think let’s also take a sort of turn and let’s say, what are some potential downsides? It sounds like a great idea to use CTV or OTT. Why might … In our discussions about my needs, why might you talk me out of using it?
Anna: One of the disadvantages of CTV is just how expensive it is. So in Q4, especially what I saw for Hulu is that the CPMs were getting pretty high. I think I previously mentioned they theoretically can start around like $45 for a CPM. I was seeing Hulu and, in general, CTV go a lot higher, like 80, 90, 100 bucks. So if you have a very strict budget, you might potentially not be able to reach people because you might not be able to be competitive enough. And CTV also just has more specific creative since it’s more like a traditional TV commercial, it’s like a 15 or a 30 second.
Chris: And it’s strict on those numbers?
Anna: Yes, it is.
Chris: Are there other options where like a 45 or a 60, does that affect the cost?
Anna: For OTT or CTV?
Anna: You can’t do it.
Chris: Okay. So it’s very …
Anna: It’s very strict, especially when you get to some of the more premium placements, content will have to be approved by the placement. So you have to get brand approval basically. So that not just anyone is placing a commercial on those channels, like you straight up have to get brand approval from Hulu before you can run an ad.
Chris: Okay. I see. So if I was building something in my garage, I couldn’t just run a Super Bowl ad.
Anna: No. Exactly.
Chris: Got it. Okay. So then what about OTT?
Anna: So something there is that it can just be skippable, so you can have kind of like non-standard video links unlike the CTV side of things. So depending what your seconds are kind of similar to what we see on YouTube is that people might just skip over it. So when I was talking about the video completion rate, that’s where people might add a certain point, just skip over it and not watch your whole video, for example. So then you’re potentially missing out on your overall reach. And I guess another downside too of OTT is that because it can be on websites, it might not necessarily, if you’re not white-listing or adding exclusions, you might potentially be hitting websites that aren’t necessarily as high as others if you’re hitting a certain device or a certain show or things like that.
Chris: Sure. So I think one other thing too that we mentioned, that you sort of mentioned that the ads can be skippable as well. So let’s just say I’m browsing the website from my local newspaper. And I get some sort of ad in one of the media players. That’s OTT, correct?
Chris: And then I skip that. It’s one of those.
Anna: It can be multiple things depending on the website, but …
Chris: I think what I’m getting at is there’s sometimes where people, like when I explain to my grandma what I do for a living, she goes, “Oh, you’re the one that designs the popup ads?” If your brand is in one of those, every now and then there can be some of those like popup video players that can be what somewhat intrusive. Would that qualify as an OTT?
Anna: Oh, like one of the ads where it’s like at the bottom and pops up and then it just …
Chris: Or even if I’m watching a news story and there’s a pre-roll commercial before the news story.
Anna: Yeah. I mean the pre roll would be, yeah, the news for example, because I tend to see a lot of placements for local news channels, programmatic.
How does traditional TV advertisement work within programmatic campaigns
Chris: Sure. Which, I mean, a lot of people read and watch the news. Yeah. So then I think before we wrap this up, we would just sort of be remiss if we didn’t ask about traditional TV placements. So I think, I don’t understand this myself that much either is where does a traditional TV buy fall under the umbrella of programmatic advertising? Can I do a traditional TV buy programmatically? Would it fall under a CTV because it’s still sort of technically on the TV? Is that going to be completely separate? How does that work?
Anna: So a traditional, traditional TV buy, if you have a cable box would be like going direct or working with an account exec at Spectrum, or AT&T or, wherever that is. In terms of more of the, like Spectrum has an app for example, that would still be more or less through them. It would just, in theory, then be considered a CTV because it is on their app on your smart TV.
Chris: So a purchase on the Spectrum TV app …
Anna: It’s more of a direct placement.
Chris: So it would not technically qualify as programmatic?
Anna: I mean, it is, but not if you’re using the Trade Desk or something like that. It would be like if you’re going directly to Hulu or directly to Spectrum or anything like that.
Chris: Sure. Okay. So it would be more of a direct buy then?
Anna: Yeah. And that’s kind of where I was talking about the differences where budget can come into play and why it’s more beneficial to go programmatically, because you can hit a ton of different placements rather than just kind of be a little bit more restricted.
Chris: Okay. That is something I’ve always wondered about because I am proudly going to be one of the last millennials with a cable box. So that’s a hill I will die on that I’m going to be sticking with cable for as long as I need to.
Anna: Yeah. And that can kind of, like in our audio podcast, when we talk about that, be a kind of similar route where we can talk about traditional radio and programmatic audio. So be on the lookout for that.
Chris: All right. Awesome. Nice teaser.
Anna: Thank you.
Closing thoughts and takeaways – budget, strategy, optimization
Chris: So starting to wrap things up here. I think the main takeaway and correct me if I’m wrong here, but I mean CTV and OTT can be a super beneficial part of your marketing strategy as long as, again, you have the proper budget and you’re using it correctly and you have the right strategy as to what to optimize for.
Anna: Yeah, exactly. Awareness is always very important for any brand. TV isn’t going anywhere. I once saw a stat about how over the past 50 or 60 years, TV consumption has increased by obviously an insane amount. And as we continue to get more and more devices, it is just going to allow you to put your brand in areas that you might not necessarily have been in if you weren’t using programmatic.
Chris: Awesome. I guess to sort of wrap it up then, did you have any thoughts we didn’t talk about that you wanted to call out?
Anna: No, we pretty much covered everything.
Chris: All right. Awesome. Well Anna, thanks again for joining us. Always great to have you.
Anna: Yeah. I’m always happy to chat with you and talk about programmatic.
Chris: Great. And then everyone, I hope you tune in next time for our next installment of the Programmatic Podcast Series. I think we’re going to call this part two. It’ll be part two.
Anna: I’ll consider this part two.
Chris: Today is part one.
Anna: Oh, part one of the overall series.
Chris: Part one of the deep dives.
Chris: Yes. Part two of the overall. So next time we’ll be part two. Tune on in for when we talk about terminology and KPIs. I know we touched a little bit about it already.
Anna: All the acronyms.
Chris: Yes. Trust me. There are a lot.
Anna: There is.
Chris: Anna has explained this to me, I don’t know how many times and I still have to ask her what they all mean. So it’ll be good to get those lined up and we will be able to get you a good reference guide as to how to follow along as we continue to talk about these things. Other than that, thanks again for listening to the Getting Granular Podcast. Be sure to like, and subscribe then just review if you like us, or if want to hear something different. That way you don’t miss out any PBC tips, tricks or news in the digital marketing world. I have been your host, Chris Cesar. Thanks for getting granular with us today.