Surviving the CPM Slump: Why Deep Audience Insights Are CTV’s Best Bet in 2024
Amidst ongoing economic uncertainty, ad budgets are also feeling the crunch, leading to increased scrutiny and downward pressure on CPMs. In addition to the prevalent economic factors and overall ad budget constraints, the scrutiny and downward pressure on CPMs are also driven by a combination of market dynamics and technological advancements in the streaming landscape.
The rapid rise of CTV platforms has led to a surge in available ad inventory. As more players enter the market, the supply of ad slots increases, which can dilute the demand and drive down CPMs. Advertisers now have more options, leading to tougher competition among publishers to secure ad spend.
Additionally, the proliferation of ad-supported tiers by streaming giants like Netflix and Disney+ has further increased the volume of premium ad inventory. While these new models attract a broader range of advertisers also, the influx of ad space has also contributed to a decline in CPMs as advertisers are being more selective and trying to drive bigger bargains.
Faced with an abundance of streaming options, CTV viewers are increasingly fragmented across multiple platforms and devices, making it harder to achieve large-scale reach. This fragmentation dilutes the value of each impression, particularly if advertisers can't easily target their desired audiences at scale. As a result, the ability to command high CPMs is challenged.
As a result, media buyers are demanding greater transparency and more measurable outcomes from ad spend. The growing expectation for proof of performance and ROI means that publishers must justify CPMs with clear evidence of effectiveness, putting additional pressure on pricing.
To navigate this complex landscape without compromising on incremental revenue, CTV publishers must focus on audience-based selling and leverage deep audience insights to offer more valuable and targeted ad inventory.
Audience-Based Selling: Precision Over Volume
Granular Audience Segmentation: By using advanced analytics to create highly detailed audience segments, publishers can offer advertisers the ability to target specific, high-value demographics and behavior profiles thereby justifying higher CPMs.
Curated Audience Packages: By bundling premium content with targeted audience segments, publishers can create custom curated audience packages that appeal to advertisers looking for both reach and relevance. These packages command premium prices due to the increased likelihood of driving conversions.
Cross-CTV Retargeting: As viewers consume content across various other CTV apps and channels, integrating cross-CTV retargeting becomes crucial. This strategy ensures that ads reach the same user across different screens , enhancing the overall impact and value of the ad campaign, thereby supporting higher CPMs.
Deep audience insights for maximizing ad effectiveness
Behavioral targeting: Publishers should invest in tools that analyze viewer behavior in real-time, offering insights into content preferences, engagement patterns, and viewing contexts. This data can be used to predict future behavior and optimize ad placements, ensuring that ads are shown to the right audience at the right time, thus enhancing ad performance and justifying higher CPMs.
Contextual targeting: Going beyond basic demographic targeting, contextual targeting considers the content being watched and the environment in which it’s consumed. Ads that align closely with the content or viewer context tend to perform better, which can also support premium pricing.
AI/ML-based predictive analytics: Using sophisticated AI/ML techniques to predict audience behavior can allow publishers to dynamically adjust ad placements. These advanced predictive models can identify which audiences are most likely to convert, enabling publishers to sell high-value impressions at a premium.
For CTV publishers, the key to navigating the current CPM pressures lies in embracing advanced audience-based selling strategies. By leveraging deep and holistic audience insights, publishers can create more valuable ad inventory that appeals to advertisers willing to pay a premium for effective reach.
