Contextual targeting: A new era in CTV

The Connected TV (CTV) landscape is undergoing a transformation that parallels the dynamic shifts in brand engagement and advertising strategies that have taken place in digital and mobile advertising.

Media companies are increasingly leaning towards offering free, ad-supported streaming TV, known as FAST. This change started slowly but has picked up speed recently — just ask the New York Times. In fact, over the next three years, nearly a third of all people in the U.S. are expected to regularly watch shows on FAST services. But, as audiences expand, how can marketers reach them with timely and effective messages?

In this transformative phase, contextual targeting has emerged as a pivotal strategy. By ensuring advertisers have precise control over both the where and the when of their campaigns, they can engage more effectively with their potential customers. Contextual advertising leverages the environment around the ad, ensuring that — for instance — an ad for a fast-food brand appears next to content that suggests cravings or hunger, like scenes of people eating.

This evolution isn’t unlike what brands have experienced in other forms of media – where they’ve moved beyond wide audience targeting to embrace more effective, performance-driven strategies. Let’s look at the history of CTV to understand where we are on the innovation timeline, and what’s enabling this new era of targeted, contextual advertising.

Era 1: Proliferation of CTV

The journey of CTV began with the era of proliferation, marked by a rapid expansion of CTV channels and platforms. As streaming technology became more accessible to viewers at home, a diverse array of channels catering to specific genres, interests, and demographics sprang up, offering viewers unparalleled choice and an alternative to traditional television. The adoption of a ‘cable-like’ format during this time was pivotal, as it provided a familiar viewing experience for those transitioning from linear TV, thus boosting the popularity among early adopters.

As CTV became widespread and users became more discerning, a rapid expansion of channels occurred, with publishers and streamers aiming to capitalize on the demand for CTV programming and offset the loss of audiences in linear TV. With this, came a new era of problems, and later solutions.

Era 2: Scale and data

This is the era most CTV advertisers find themselves mired in today. As the CTV marketplace grew in size, it began to be characterized by its opacity and fragmentation, posing significant challenges for marketers aiming to target and understand ad placement.

For many marketers, CTV advertising is about refining audience and intent-based targeting strategies. The focus is on reaching the correct viewer or household.

In an ecosystem devoid of traditional identifiers like cookies, advertisers rely heavily on direct insertion orders with media companies or on metadata from Demand-Side Platforms (DSPs) to navigate the vast and complex landscape of streaming content.

However, audience-based targeting alone has limitations—marketers must ask themselves whether the message is reaching its intended target at a time when it will move the needle. For instance, ads meant to reach the adults in the home — like insurance, pharma, autos, or other similar products — may not perform as well if they are delivered in programming geared towards kids and teens.

Frustratingly, despite the immense volume of data flowing through the CTV ecosystem, a key challenge remains: making this data digestible and actionable to ensure that advertisements are not only relevant and appealing but also effectively placed at the perfect moment across a wide array of programming.

Era 3: Contextual targeting

This is where we find ourselves today — in a period of untapped opportunity. As CTV continues to evolve, we’re ushering in an era focused on refining the art of contextual targeting, where technology enhances our ability to forge deep connections with viewers. Wurl is aiming to be at the forefront of this era with our innovative solution, BrandDiscovery, which integrates GenAI-powered strategies to unlock the opportunity of contextual targeting. By understanding and classifying on-screen elements like imagery, sounds, and dialogue, BrandDiscovery allows advertisers to target their ads with unprecedented precision.

The introduction of BrandDiscovery has provided marketers with a tool that offers real-time, scene-level analysis, giving them control over ad placements that previously relied on broader, less accurate program data. And across a splintered ecosystem with inconsistent metadata, GenAI can pick the moments that work, no matter where they are.

This technological advancement means ads can be contextually aligned not only with the content genre but also with the emotional tone of specific scenes. For instance, if a show segment exudes sadness, an ad with a sympathetic tone might be placed immediately afterward, enhancing viewer receptivity and engagement.

The role of emotions in advertising cannot be overstated — emotional congruence between ad content and the viewing context significantly boosts ad effectiveness. This combination of performance and brand-building is unique to CTV — giving marketers the ability to get results through the full-funnel.

For more information on how BrandDiscovery can help you reach the right audience on CTV, get in touch.