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The Pitfalls of Performance Obsession in CTV Advertising

Why a focus on short-term gains may not be the best strategy for using connected TV

By Jaime Singson    October 17, 2024     5-minute read

Connected TV (CTV) is rapidly emerging as a dominant force in the advertising landscape, blending the best features of traditional TV and digital channels. However, as CTV becomes mainstream, a concerning trend is surfacing: Many marketers may be treating CTV primarily as a digital performance channel.

This approach, typical in digital advertising, is often driven by budgets for CTV coming from digital allocations, which can lead to a narrow focus on immediate, quantifiable results. This performance-centric mindset mirrors past digital missteps; overemphasizing short-term CTV metrics may lead to diminishing returns. By focusing too heavily on immediate outcomes, marketers risk missing out on CTV's broader, long-term advantages.

The key question is how marketers can leverage CTV's unique strengths while avoiding performance overkill.

The Digital Mindset's Impact on CTV Strategy

Many digital marketers may approach CTV advertising with a mindset shaped by paid search and paid social experiences. These channels are built around performance-driven models, where success is measured by immediate actions such as clicks and conversions. Marketers who bring this narrow focus to CTV likely prioritize short-term results over long-term brand-building.

In both paid search and social media, the emphasis is on driving immediate outcomes, whether those include capturing high-intent users through clicks or optimizing social ads for conversions. However, CTV operates differently. With the exception of shoppable ads, which are still an emerging capability, there is generally no direct "click" in CTV. Typically, performance in CTV is gauged by how effective the TV ad is at driving actions on other household devices, such as a website visit through a mobile phone, made possible through vendors' backend device graphs. The risk is that marketers who are accustomed to the immediacy of digital channels may apply the same mindset to CTV. This could lead to underestimating the medium's potential for brand-building and long-term engagement.

Moreover, multitouch attribution models, common in digital campaigns, can sometimes skew the perceived effectiveness of these channels. Practices such as cookie bombing, where retargeting campaigns flood users with cookies to increase a channel's conversion credit, deliberately game these attribution models. While some may not explicitly consider it fraud, cookie bombing manipulates attribution models by inflating touchpoints, giving certain channels undue credit. This overemphasis on volume, pervasive in display advertising, often detracts from engagement quality and true contribution to brand growth. CTV retargeting is a legitimate strategy enabling brands to re-engage audiences. However, as CTV grows, some may be tempted to adopt questionable practices such as cookie bombing at the expense of meaningful brand-building interactions.

Marketers must move beyond narrow digital performance metrics to tap into CTV's potential. Recognizing CTV as a powerful tool for performance and brand-building, can allow for strategies that drive immediate results and foster long-term brand growth.

Maximizing CTV's Potential with a Full-Funnel, 'Brandformance' Approach

CTV offers a unique opportunity to blend traditional TV's mass reach and emotional impact with digital advertising's precision and measurability. To harness this potential, marketers should adopt a full-funnel strategy that integrates brand-building with performance marketing, or "brandformance."

CTV's versatility allows brands to engage audiences at every funnel stage. While digital channels such as paid search and paid social excel at driving conversions, they face limitations in brand-building. Paid search, which is primarily text-based, struggles to create emotional connections. Paid social has become increasingly expensive, and its long-term brand-building effectiveness remains uncertain. Social ads, often consumed on small mobile screens and shortened to fit fast-paced user-generated content, make it challenging to tell a rich brand story in just a few seconds. In contrast, CTV offers broad reach and the ability to use 15- and 30-second video ads for deeper storytelling and emotional resonance. It also supports precise targeting to nurture and convert audiences who are lower in the funnel.

A full-funnel brandformance approach involves investing in creative that resonates emotionally in CTV's immersive viewing experience. Viewers engage with content in a lean-back setting, often on the biggest screen in the house. This may enhance message retention and brand recall, crucial in a media environment where ads on other channels are easily skipped or ignored.

Thanks to generative artificial intelligence (AI), producing high-quality CTV creative is now more accessible. This technology has lowered production costs, enabling even smaller advertisers to create stunning TV-ready videos. By leveraging CTV's capabilities and these cost-effective tools, brands can craft campaigns that engage audiences across the entire funnel, from awareness to conversion.

Effective brandformance requires balancing brand-building with performance metrics across the funnel. Upper-funnel efforts should maximize the campaign's strategic audience reach, ensuring key potential customers are aware of or reminded of the brand. While CTV metrics such as brand lift and ad recall are valuable, they are often supplemental due to their slower collection process, which can limit real-time optimization — a digital strength. Mid-funnel actions, such as site visits or app installs, nurture interest and guide prospects closer to conversion. Finally, lower-funnel optimization focuses on converting these engaged prospects into customers, with success measured through direct conversions — areas where paid search and social excel.

This comprehensive approach ensures that CTV effectively contributes to top-of-funnel awareness, mid-funnel consideration, and bottom-of-funnel conversions, creating a virtuous cycle in which each stage of the funnel reinforces the next.

Understanding the Halo Effect of TV Advertising

The halo effect of TV advertising is a compelling reason to integrate CTV into a full-funnel marketing strategy, as both traditional and streaming TV have consistently shown that the powerful combination of sight, sound, and motion on the big screen amplifies the effectiveness of other marketing channels. TV ads not only capture viewers' attention in the moment but also boost brand recognition, making audiences more likely to engage with the brand across platforms such as paid search and social.

This halo effect occurs because TV's broad reach and emotional resonance can significantly enhance brand awareness and recall, which in turn improves the performance of other channels. For instance, after watching a TV ad, consumers are more inclined to search for the brand online, interact with social media ads, or click on paid search results.

While this effect is more challenging to measure than direct response metrics, it is quantifiable through incremental lift studies. These studies are essential for any brandformance TV campaign, as they measure how TV exposure drives key actions such as site visits or clicks on organic, paid search, and social ads. They provide a gold-standard method for understanding CTV's impact on the broader marketing ecosystem.

Best Practices for Implementing Brandformance in CTV

To effectively incorporate brandformance into a well-formed CTV campaign strategy, it's crucial to balance brand-building with performance metrics across the entire funnel.

Here are key steps advertisers can use to guide their efforts:

• Set clear funnel objectives. Brand teams should define specific goals for each funnel stage. The upper funnel should focus on maximizing the reach of a strategic audience to ensure potential customers are aware of or reminded of the brand. Mid-funnel campaigns should nurture interest through actions such as site visits or app installs. And lower-funnel efforts should target direct conversions.
• Leverage high-quality creative. Compelling video content that can capitalize on CTV's immersive experience is crucial. Generative AI tools have made high-quality video production more affordable, enabling even smaller brands to create ads that resonate emotionally and capture attention.
• Employ robust measurement techniques. Conducting a study on incrementality of CTV campaigns on other channels, such as site visits or clicks on paid search and social ads, will help provide a fuller picture of the campaign's halo effect. These studies provide critical insights for optimizing a strategy by quantifying how TV exposure enhances overall marketing performance.
• Optimize campaigns in real time. By regularly monitoring performance data and making dynamic adjustments on the fly, advertisers can respond quickly to audience behaviors, ensuring that each funnel stage aligns with the brand's objectives and contributes to campaign success.

By following these best practices, marketers can maximize the effect of their CTV campaigns, ensuring that they drive immediate actions and build long-term brand equity. A comprehensive brandformance strategy ensures that each funnel stage reinforces the others, creating a sustainable cycle of engagement, consideration, and conversion.

Simulmedia is a partner in the ANA Thought Leadership Program.