target audience: TECH BUYER  Publication date: Feb 2024 - Document type: IDC Perspective - Doc  Document number: # US51749724

Update on Advertising on Connected Television with Retail Media Networks

By:  Alex Holtz Loading


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This IDC Perspective provides update on advertising on connected television (CTV) with retail media networks (RMNs). The retail media advertising landscape via retail media networks is growing rapidly, driven by the power of first-party data and the desire for more targeted and effective advertising across all channels, but especially connected TV. The industry is moving toward a more unified, data-driven approach to advertising across all channels and platforms, which presents vast new opportunities for broadcasters and publishers no matter their size, region, and core audience.

As a result of this "highly valued" first-party data, retailers collect an incredibly detailed amount of information about their customers, including purchase behavior, expanded demographics, and other attributes that influence purchases. This data is used to deliver more relevant messages for their own brand as well as advertiser brands purchasing media from a retailer's RMN.

The challenge moving forward is to make sure ads are properly associated with premium quality content and that they are personalized, targeted, and appropriately matched with the right audience data set. Advertisers' reluctance to commit more spend on CTV is understandable to an extent due to a huge volume and multitude of FAST channels where there will certainly be low-quality content to navigate around. Therefore, working with a FAST channel solution vendor that understands this and provides validated services that leverage artificial intelligence (AI) and data science technologies to properly "match" the right ad with the right content for a specific viewer or audience is paramount. Leveraging these technologies within the content providers' FAST channel solution will maximize CPM levels that drives campaign success and return-on-investment (ROI).

Performance marketers will only consider shifting budgets into streaming if the channel can share back results as quickly and accurately as other digital channels, and therefore, a CTV solution must be able to do this effectively. The more the industry pushes to turn CTV into a performance channel, the more programmatic automation share adoption grows, making 2024 the year of performance marketing and programmatic CTV with integrated and centralized RMN audience data.

"As the deprecation of cookies finally comes to an end in 2024, the integration of RMNs into CTV leveraging the highly valued first-party data creates a tremendous opportunity for broadcasters and publishers alike that need to increase revenue sufficiently to overcome streaming costs," states Alex Holtz, research director, Worldwide Media and Entertainment Digital Strategies at IDC. "This adoption will drive CTV to become a high-performance programmatic channel in the not-too-distant future!"


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