Advertisers are losing $1 billion on CTV ads that run while TVs are off

Advertisers are losing $1 billion on CTV ads that run when TVs are off because people are not paying attention to them.

The news

Almost 1 in 5 ads played on devices like dongles or gaming consoles are being played when televisions are turned off, costing marketers $1 billion per year in wasted ad spend, according to a report from GroupM and iSpot.

• GroupM and iSpot say they found no evidence of the issue when users streamed from native smart TV apps.
• About 50% of all streaming on smart TVs is done through native apps. This means that about 8% to 10% of all ads shown on CTV are being shown on screens that are turned off.

The problem

The study found that when users turn off their televisions, the streaming devices sometimes don't get an "off" signal from the attached HDMI cable.

• Vizio's vice president said the findings were not surprising because smart TVs do not directly control ancillary devices.

What this means

The findings show that the advertising industry is in trouble. The industry is already dealing with a lot of uncertainty, like the uncertain future of digital ads and how to measure TV viewership. This makes things harder for everyone involved.

• TV advertising is getting more and more expensive. In 2017, we predicted that TV advertising would reach $2.6 billion. But this year, it will reach $18.9 billion and it will continue to grow in the future.
• This newfound doubt over the effectiveness of ad-supported video (AVOD) also comes at a bad time, as both streaming services and marketers look to AVOD channels to generate more revenue and reach broader audiences, respectively.
• Although the problem may be almost non-existent for smart TV apps, that news is made more complex by the fact that USCTV users outnumber smart TV users by nearly 90 million.

Solutions

TV manufacturers and streaming services are working on a way to fix the problem with the TVs. But it will take a long time because the problem is with the hardware.

Paramount

Paramount is working on a feature that will ask users if they are still watching, and shut down the app if no response is received. This could help reduce the number of dead ads, but it could also annoy users who leave shows running while doing other tasks.

Amazon

Amazon told the Journal that it is "working hard" to maintain customer trust, and is in communication with iSpot and GroupM to "learn more" about its findings.

iSpot

iSpot, which is always trying to get a bigger piece of the fragmented measurement landscape, said it would soon offer a solution that would verify if ads were delivered correctly.

The big takeaway

The report casts doubt on the effectiveness of several advertising sectors that are growing. The ad industry is already facing tough times and uncertainty about the effectiveness of multiple digital ad channels. The CTV market is growing, but it has a history of fraud and inaccurate measurement. More people are using CTV devices than the number of solutions manufacturers and streamers are developing to make it more reliable.

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