CTV Has a 'Real' ID Problem
Walled-gardening and shaky IP addresses may be be holding back the would-be flood of performance brands
Everyone in the TV advertising world wants the same thing - to grow the business. But a lack of identity may be holding everyone back.
More to the point, one of the major drivers behind the ongoing enthusiasm for CTV advertising is that it will not only help the TV business hold onto viewers and advertisers that are leaving linear - but also that it will significantly broaden the pool.
Instead of just having dollars ‘move over’ to streaming, ad sellers want access to way more advertisers and dollars, ideally from two new revenue sources:
Direct response advertisers
In either case, these newish-to-TV brands need to be able to identify customers using various data tools and targeting techniques. The hope is these advertisers can do so as effectively as they can on social platforms, or at least as well as they have on the web, (thanks to those soon to be disappearing cookies).
But there’s an inherent problem. Right now, even as CTV ad spending surges, identifying consumers remains messy.
“The brilliance to me of the world of CTV, and I'm a huge, huge content consumer, is how many players there are in the space,” said Megan Jones, Chief Digital Officer at Digitas on my podcast this week. “I think that's amazing from a consumer standpoint. It does present one of the biggest challenges in advertising…How do you look for consistency across partners? How do you counsel clients on one universal way of doing things”
In other words, the more popular streaming services we have, the more unique sets of ad tech and login data we have. That level of identity fragmentation isn’t ideal for big traditional TV brands, as they look to do more data matching and more refined targeting.
It’s virtually a non-starter for those social brands who want TV to work like Instagram.
"Identity is crucial (for performance brands),” said Dan Larkman, CEO of the CTV ad specialty firm Keynes Digital. “The biggest hurdle we have in CTV is identity. The proxy today is IP, which is wildly inaccurate. For example, Comcast changes it every day."
Not only do some internet providers and cable companies change their IP addresses frequently, but new technology is causing this inaccuracy to accelerate. Plus, more and more American homes are getting internet access from wireless providers like T-Mobile - and in the mobile world, data sharing is challenging to say the least.
And let’s not forget, there is a decent chance that regulators may shut down the use of IP addresses entirely.
So there seem to be two choices. Either the industry agrees upon a new kind of universal TV ID that cuts across operating systems, apps, ad tech platforms, etc….or ad buyers just deal with a few big streaming platforms that don’t talk to each other.
“Some of the legacy streaming partners - think the Amazons of the world, the NBCUs in some degree Disney - they understand how to offer audience first targeting capabilities and measurement,” said Jones “It’s because they've been in this business since the beginning.”
Still, some would argue that the targeting solutions available in the TV market are still fairly rudimentary compared to those of the tech giants.
“There is a difference between more advanced targeting and actually knowing your audience and customer,” said Mark Douglas, CEO of the performance TV ad tech firm MNTN. “No one [in TV] has a platform like a Meta or a Google, where you can hand them data and a pile of cash and they can almost optimize for you.”
As for a broad CTV ad solution, well, the problem is, per Larkman, that most are propped up by flimsy IP address data - which doesn’t help smaller advertisers feel much confidence.
There are lots of other ideas out there - household targeting, people-based IDs (see below), the Trade Desk backed UID 2.0.
“No one has pieced it all together,” said Douglas. But, between some of the bigger players in the space,"we may be collectively arriving at a more precise identifier that is privacy compliant.”
Douglas suggested that perhaps a third party such as the IAB might look to steer the industry toward a common solution. “I think regulators would actually welcome that.”
But I have to wonder if TV has the collective vision and wherewithal to make this easier for brands that want to target, measure and optimize across an entire medium, not in a few select gardens.
“This idea of unification across all, I don't think is realistic,” said Jones. “That does represent a challenge on behalf of clients, because obviously…we’re pushing them to shift dollars into this medium. And so from that standpoint, it's the right place to invest dollars, but it's not equipped with the same solutions that we have in the digital space.”
Why Ad Tech and Mar Tech May Need to Get Married
This interview is part of a multipart series with my sponsor Epsilon. Today I’m talking with Lee Lewis, Director, Product Management at Epsilon on why its increasingly harder to keep customer retention and advertising apart.
Next in Media: Can you talk about the importance of people-based identity? There is a mindset that the industry is used to do things a certain way—using cookies and focusing solely on first-party data - but that seems to be limited.
Lewis: There are a couple of things to consider. First, we need to look at how businesses traditionally operated. You had a team working on nurturing customer relationships—that’s the MarTech side, whether it was a CRM system or now a Customer Data Platform (CDP). On the other hand, there was a separate team focused on digital media and activation.
Next in Media: Right, so different people, different tools, and different roles…
Lewis: Exactly, different stakeholders, KPIs, and success measures. But with the convergence happening, I think the industry is starting to realize that you can’t do one or the other. To build a data-driven approach for advertising, you have to integrate the nurturing component of marketing—using CDPs and CRMs—with digital media and activation strategies. That’s what really drives a data-driven approach.
Next in Media: That makes sense. But I imagine there are challenges both in terms of the technology and organizational alignment. How far along are we with most clients in overcoming those challenges?
Lewis: That’s a very good point. Epsilon is uniquely positioned because we’ve developed a strategic approach to technology integration. Today, clients often find themselves buying multiple pieces of technology—CDPs, ad tech solutions, and everything in between. The best way to approach this is not just conceptually integrating these ideas but developing a technology stack that includes what I call “embedded identity.” Instead of having separate identities for customers and different solutions for digital media, there needs to be one seamless identity—what I refer to as currency.
Next in Media: Interesting. So you're talking about a consistent identity that spans across the entire ecosystem?
Lewis: Exactly. Currency means that when you go from one system to another, there’s no conversion rate. You’re dealing with the same "currency" across the entire digital ecosystem. The challenge with digital media is that targeting individuals is often not one-to-one, making it difficult to connect customers to impressions delivered through digital media. Ultimately, the goal is to connect the customer’s purchase behavior with the impressions served and the measurement that shows whether the money spent was worthwhile. This seamless flow of identity from the customer’s purchase to the digital ad impression is something the industry has struggled with.
Next in Media: So, do you think we’ll start seeing MarTech companies adopting ad tech capabilities, and vice versa? Or do you think there’s room for startups that can offer a unified solution?
Lewis: You’re seeing a little bit of both. For example, in the digital media space, some DSPs (Demand-Side Platforms) are introducing onboarding capabilities. They’ve always had data marketplaces integrated into their platforms, but now they’re recognizing the importance of embedded identity within their products. Epsilon, for example, launched a CDP last year. Traditionally, CDPs were more focused on owned channels—email, direct mail, etc. But we made the decision to integrate digital media and activation into that product.
Next in Media: So that’s where you see the shift is happening….
Lewis: Exactly, it’s expensive for CDPs to build digital media activation capabilities if they haven't been doing it all along. The reality is, that if something was built to be a CDP, it’s probably best to keep it focused on that core competency. The same goes for digital products. That’s why, from my perspective, the ideal approach is to develop technology that is already integrated—one that merges CDPs, identity onboarding, and DSPs seamlessly. That’s the holy grail.
Next in Media: There’s a lot of buzz around AI-driven media buying, planning, and optimization, but also some discomfort about the lack of control. How do you see this playing out? Are clients excited, cautious, or maybe a bit of both?
Lewis: The word that comes to mind is privacy. AI requires a huge amount of data to work effectively. From our perspective, we’re very aware that clients want to feel comfortable working with technology vendors, whether they’re adtech or Mar Tech providers. The key here is making sure that the data being used is only that of the client. There’s no gray area in terms of data usage. For us, it’s essential to work closely with legal teams to ensure that clients are comfortable, especially when it comes to consumer privacy.