Dispatch from CES: 4 factors shaping TV advertising in 2023

Each year brings the opportunity to set a new direction and 2023 is no different. Appropriately, CES is a place each January where the future of media comes to life, acting as a guide to help buyers and sellers sink or swim as they navigate a new year.

This year at CES, leaders across the industry discussed what’s new and what’s next for TV advertising. I saw four big themes emerge from our days on the Strip, both challenges and opportunities to take into account in 2023.

1. Automation has hit a tipping point.

Throughout 2023, automation via programmatic buying in the converged TV space will continue to be on the rise. According to eMarketer, 2022 was the first year in which video outpaced non-video in programmatic ad spending, with connected TV the main driver of this shift.

Moreover, programmatic is increasingly offering an enormous opportunity to unlock better targeting, measurement and attribution capabilities that can establish more relevant messages and maximized outcomes. 

But for programmatic to reach its full potential for premium video, mutual trust and collaboration across the industry are vital. The buy-side needs and deserves to have trust in what’s being delivered and how it’s being measured, just as those on the sell-side need to know that their inventory is consistently represented and monetized correctly. 

The industry still has a ways to go in this respect, but the pieces are in place and a simplified, automated future for TV is becoming a more realistic vision. 

2. Go FAST or be last.

FAST (free ad-supported streaming TV) services are continually gaining traction, even among an increasingly crowded media landscape. In fact, FAST channels are now accounting for an impressive 50% of total OTT viewership and 29% of total ad views, according to FreeWheel’s latest Video Marketplace Report. 

FAST is a win on all sides of the ecosystem. For consumers it is a cost-effective way to watch content without a subscription. For sellers it’s an opportunity to increase distribution of live and on-demand content. And for advertisers it provides an avenue to find and engage with audiences discovering new content in a streaming format. 

Especially considering any economic headwinds that this year may bring, media owners should be investing in FAST platforms or tiers, or risk losing out. 

3. Increased regulations will guide new strategies.

It’s clear that privacy will be on the minds of nearly all TV buyers this year, and for good reason, as new privacy laws took effect this month and with more to come in 2023. This has the potential to create more complexity. 

What is an advertiser to do? CES reiterated that options abound for better viewer targeting, measurement and attribution, but the key is doing this without sacrificing consumer trust and privacy. As an industry, all strategies should be based on the fact that we are the stewards of the consumers we serve, and we therefore must proactively protect them. While our industry still develops many of the standards or alignments needed to make this happens, industry interoperability for scale and flexibility will help us adapt quickly to future regulations. 

There is plenty of innovation to celebrate, and we must continue to move forward with new and creative ways to ensure that the power and performance of TV is maintained in a privacy-focused manner.

4. Prioritizing the ad experience is nonnegotiable.

The last point is perhaps the most important: Putting the consumer first is the key to any successful video media buying strategy. As streaming goes mainstream, consumers have less patience for the “new guy” challenges of streaming advertising, such as repeated ads and dead airtime. It’s time to catch up with linear.

In 2023, a top priority should be improving the streaming ad experience with a heightened focus on targeting only the most engaged, responsive audiences with relevant, creative messaging. Another one, and more important than ever, is relying on technology to create a more seamless and intentional delivery of those ads without conflicts, without repetition and without dead air. 

With all the choices that exist today and more major streamers offering ad-supported experiences, consumers will remain loyal only to platforms or advertisers that create a more enjoyable viewing experience and who work to earn their valuable time and money. 

Today’s cross-platform, multiscreen TV ecosystem is in a state of continuous change, and it’s up to us to keep the industry afloat in these sometimes-rough waters. As these factors continue to shift TV advertising as we know it, the tech, buy-and-sell-sides of the advertising industry all must remain nimble, proactive and innovative in 2023 in order succeed.