Next in Media Episode Summary: "Why CTV Ad Targeting is Much Harder Than You Think"

Podcast Information:

• Title: Next in Media
• Host: Mike Shields
• Guest: David Levy, CEO of OpenAP
• Episode Release Date: February 4, 2025

Introduction

In this episode of Next in Media, host Mike Shields engages in an insightful conversation with David Levy, CEO of OpenAP. They delve deep into the complexities of Connected TV (CTV) ad targeting, exploring the challenges brands face in aligning their audiences across various platforms and measurement services. The discussion also touches upon industry dynamics, such as the competitive landscape among major TV players and the potential for expanding the advertiser base within the TV ecosystem.

OpenAP’s Evolution and Mission

David Levy begins by tracing the origins and evolution of OpenAP. Initially focused on linear television, OpenAP aimed to standardize innovative advertising solutions across different TV networks to enhance scalability for advertisers.

• Quote: "The mission really started with this idea that all of the different TV networks were so focused on ad innovation... how can we make the experience of advertising within our great shows better for clients?" ([01:50])

As the industry shifted towards streaming, OpenAP adapted its focus to address the unique challenges of CTV ad targeting, emphasizing the need for consistent audience targeting across multiple platforms.

Challenges in CTV Ad Targeting

One of the central themes of the episode is the inherent difficulty in achieving consistent ad targeting in the CTV landscape. David explains how audience data undergoes multiple translations— from first-party data to household targeting via device IDs or IP addresses—leading to inconsistencies.

• Quote: "The challenge is that what you don't really realize is that audience then goes through multiple different hops and translations before it actually ends up going into an ad server." ([07:22])

This fragmentation results in discrepancies between targeting and measurement, making it difficult for advertisers to ascertain whether their campaigns effectively reached the intended audience.

• Quote: "If those don't match what was used to create the audience target, it's going to look like it was significantly out of target. But that's not necessarily true." ([10:12])

Importance of Standardization and Transparency

Levy emphasizes the necessity of creating standardized processes to ensure consistency and transparency in data handling from targeting to measurement.

• Quote: "Ideally, the client can help decide how to take their audience and translate that into identifiers that can be used for targeting." ([10:42])

He advocates for industry-wide collaboration to establish common protocols, allowing advertisers to maintain a consistent approach across different media companies without being hindered by proprietary systems.

Data Quality and Identity Management

Beyond standardization, the quality of data used in ad targeting is paramount. David discusses the limitations of relying solely on IP addresses due to their transient nature, highlighting the shift towards more stable identifiers like email addresses.

• Quote: "IP is a great signal... unless you are committed to ensuring that you're keeping up to date with that rotation, then it's a hard signal to use." ([11:58])

However, he acknowledges that while email provides more stability, its limited prevalence poses challenges for broader adoption.

Collaborative Efforts vs. Proprietary Systems

The conversation touches on the tension between collaborative industry standards and individual media companies developing their own identity graphs and targeting tools.

• Quote: "As long as you're also kind of collaborating and cooperating in some of the bigger industry initiatives, I think both things can be true and both can benefit you." ([14:30])

Levy argues that media companies can simultaneously innovate internally while participating in broader collaborative efforts, ensuring that individual advancements do not detract from collective progress.

Measurement Innovation in Streaming

Transitioning to measurement, Levy critiques the overemphasis on measuring impressions and household reach, especially as viewership shifts to streaming platforms. He envisions a future where measurement extends beyond reach to understanding the impact of ads on consumer behavior.

• Quote: "What's much more important is how do we consistently resolve signal back to the right household and then be able to open up measurement towards a lot more measurement innovation further down the funnel." ([19:20])

He anticipates that clean room technologies will facilitate more accurate data linking and enable deeper insights into ad effectiveness, ultimately driving better ROI for advertisers.

Future Outlook and Optimism

Despite the challenges, David Levy expresses optimism about the industry's trajectory. He is particularly excited about the potential of clean room technologies to enhance data interoperability and measurement capabilities.

• Quote: "What excites me is... we can have a lot more insights into what's actually happening and give more actionable insights to customers into how to drive more ROI." ([22:13])

Levy envisions a landscape where advertisers can execute highly targeted campaigns with ease, rivaling the simplicity of platforms like Meta and Google, thereby democratizing access to premium advertising opportunities.

Conclusion

The episode concludes with a look towards the future, highlighting the critical role of collaboration, standardization, and innovation in overcoming the current hurdles in CTV ad targeting. David Levy’s insights underscore the importance of industry-wide efforts to enhance data quality and measurement accuracy, paving the way for more effective and scalable advertising strategies in the evolving media landscape.

• Final Quote: "If we can get to the place where an advertiser can activate a campaign within, you know, a couple days, that would be, I think, the goal." ([23:38])

Key Takeaways:

• Complexity of CTV Ad Targeting: Multiple data translations lead to inconsistencies in audience targeting and measurement.
• Need for Standardization: Establishing common protocols can enhance data consistency and transparency across platforms.
• Data Quality Matters: Transitioning from less stable identifiers like IP addresses to more reliable ones like email can improve targeting accuracy.
• Collaborative Industry Approach: Balancing internal innovation with collective industry standards is crucial for scalable solutions.
• Future of Measurement: Emphasizing deeper measurement metrics beyond impressions to understand ad impact on consumer behavior.
• Optimistic Outlook: Clean room technologies and industry collaboration hold promise for more efficient and effective CTV advertising.

Notable Quotes:

• "The mission really started with this idea that all of the different TV networks were so focused on ad innovation..." — David Levy ([01:50])
• "The challenge is that what you don't really realize is that audience then goes through multiple different hops and translations before it actually ends up going into an ad server." — David Levy ([07:22])
• "Ideally, the client can help decide how to take their audience and translate that into identifiers that can be used for targeting." — David Levy ([10:42])
• "IP is a great signal... unless you are committed to ensuring that you're keeping up to date with that rotation, then it's a hard signal to use." — David Levy ([11:58])
• "If we can get to the place where an advertiser can activate a campaign within, you know, a couple days, that would be, I think, the goal." — David Levy ([23:38])

This comprehensive discussion between Mike Shields and David Levy offers a deep dive into the current state and future prospects of CTV ad targeting, highlighting both the challenges and the innovative solutions poised to transform the media advertising landscape.