Can the CTV Advertising Ecosystem Avoid the Mistakes of the Past?

It’s an understatement to say that advertisers are not thrilled with the digital advertising ecosystem. 

In its recent report, Programmatic Media Supply Chain Transparency Study, the ANA, a vocal advocate for supply-path optimization (SPO), found that inefficiencies and fraud in the advertising ecosystem conspire to swallow a significant bite of what should otherwise be working media dollars for advertisers. 

As linear TV rapidly approaches its fully digital future, we can learn a lot from the digital display past to create a better CTV future. Indeed, many advertisers fear the same problems of the past are already creeping into the CTV advertising ecosystem. 

Here are some of the problematic issues appearing for CTV advertisers: 

Frustrating inefficiency

The CTV advertising ecosystem is revealing some of the same inefficiencies as the overall digital advertising world. The ultimate result is a reduction in the power of brands’ media budgets, a reduction that essentially exacts an “ad tech tax” on advertisers. The ANA estimates that the digital advertising ecosystem’s inefficiencies lead to $22 billion in unproductive and even wasted spending annually.  

Significant fraud

Like the digital advertising ecosystem, the CTV ecosystem often has additional “hops” between intermediaries that introduce more opportunities for ad fraud. For example, DoubleVerify recently uncovered CycloneBot, an ad fraud scheme that had a potential financial impact of $7.5 million per month for CTV advertisers. That’s clearly unacceptable.  

Lack of sustainability

Sustainability is a further issue with the ecosystem. “Scope3’s latest emissions data shows digital display advertising and streaming emits 7.2 millon metric tons of carbon dioxide equivalent (CO2e) annually. That’s the equivalent to the electricity consumption of 1.4 million U.S. households each year,” the ANA reported. Each additional “hop” in the digital advertising supply chain boosts the carbon footprint. Reducing “hops” will increase the supply chain’s sustainability. 

Lack of transparency and innovation

The Department of Justice last year filed a lawsuit against Google alleging the company has built an ad technology monopoly. Some industry observers believe that Google’s outsized role in the advertising ecosystem has diminished transparency (essentially “grading your own homework” when sharing campaign performance results) and innovation (little incentive to improve a system that is already so lucrative).

What's to be done?

CTV advertising is at an infection point. As TV hurtles toward its fully digital future, Innovid sees an opportunity to avoid the mistakes of digital advertising’s past.

At Innovid, we are focused on making the CTV ad ecosystem better for everyone. We believe there are solutions to these issues — especially in the connected TV (CTV) ecosystem.

In the coming days, we will be unveiling an initiative and new products that will solve some of the key issues in the CTV advertising ecosystem. Watch this space for more information on how Innovid can help reduce time, effort, fraud, and environmental waste in your CTV advertising.