CTV opens up not just the ability to target ads to individual users and households, but also to introduce more interactivity into ad formats. We’ve started to see the first fruits of this interactivity, with some broadcasters experimenting with QR code-based formats, but we’re also seeing more in-depth interactivity starting to come to market too.
One of the companies leading this charge is VDO.AI, an ad tech business born out of Indian digital media company Z1 Tech. VideoWeek spoke with Amitt Sharma, CEO of VDO.AI, to hear more about how advertisers are working with interactive formats, and the factors which could accelerate the uptake of interactivity in CTV advertising.
How did VDO.AI start, and how do you now work with advertisers?
Working with Z1 Tech’s publisher properties back in the day, in around 2014 to 2015 we saw the success YouTube was having with ads – it went from a massive loss making business to a massive profit making business for Google. So we wanted to see how that technology could be used in the open web to help drive publisher revenues, and that idea in 2017 became VDO.AI.
Fast forward to today, and we operate all across the globe – the US is our primary market, but we also have presence in markets including Canada, Hong Kong, Spain and the UK. We work on two fronts, as we work with brands and agencies, but also with publishers who we source inventory from.
Our solution for brands and agencies is largely focused on large screen devices and formats. We’re seeing the fundamental shift in ad budgets towards connected TV, and we see ourselves as enablers for our brand and agency budgets to pivot their traditional linear TV budgets onto connected TV content.
And one really interesting thing about CTV is that you have two-way communication, so you can introduce interactivity into ads. You can conduct a poll, run a quiz, include a QR code, or even play a game during the ad. So we enable that interactivity.
And then we also help with targeting ads on CTV based on user data, and retargeting outside of CTV.
How does targeting and retargeting work, in terms of data and identifiers you’re using?
We sit as the logistics layers, so we work the DMPs and CDPs on one side and creatives on the other side, and then everything gets packaged into the VDO.AI solution. So we’re fully malleable when it comes to adopting any IDs, pixels, or formats, so it’s up to our clients how they want to use it.
How does the creation of interactive formats work? Given that these aren’t just standard 30 second TV ads, do you work with clients on the creation of ads?
We’re building these capabilities out all the time, and the tech sits basically as plug-and-play modules, so the advertisers choose which interactive elements they want and then can just plug them in. We have a team of graphic designers we can get in when we need to, to actually design the look and feel of those interactive elements. But generally there’s not too much back-and-forth between us and the advertiser: they give us the assets, we customise the experience, get their approval, and then we’re off to the races.
What sorts of engagement levels do you see with interactive formats on TV? And are agencies looking at these interaction metrics as a proxy for attention?
We can capture all the data on how consumers are interacting with ads, and advertisers can see that data via our dashboard. They can then make adjustments mid-flight, which again is one of the beautiful things about CTV, so they can alter those interactive elements based on that feedback.
The problem with using interactivity for attention is that interaction rates will vary on different devices. On some smart TVs and CTV devices interaction is much more intuitive and easy for consumers than others. When everyone is on the same playing field, we can set baselines and standards for interaction in CTV environments, but we’re still getting there.
With something like QR codes it’s more simple, because you can run QR codes on pretty much any screen, so you have that baseline and use interaction rates as a metric. But for other types of interactivity, it looks different on different devices, so we’re not there yet.
How do you think TVs will evolve to better facilitate interactivity?
I think we’ll see newer devices come out with gesture control. Like Steve Jobs said, the best way to navigate digital environments is with your finger without any sort of controller. That’s why the stylus failed on smart phones, and I think we’ll see the remote control phased out too, you’ll just be able to use gestures.
That sort of technology would push interaction rates through the roof, and interactivity would be even more naturally integrated into that sort of environment.
When you’re talking to brands who have invested in linear for a long time, do you find there is still hesitancy around shifting budget towards CTV?
There’s some inertia there, because to be honest, a lot of stakeholders make money when agencies spend on linear TV. Linear TV is like a machine gun, it’s a spray and pray approach. Then lots of stakeholders across the supply chain get budgets going towards them, to help the advertiser reach their target audience. CTV is more of a ‘sniper’ approach, because of the ability to target customers.
So sometimes a bit of education is necessary to get the end spender to pivot their budgets over. But it’s not a hard sell, when you have these conversations, it makes sense for advertisers. Is there inertia? Yes. But are buyers adopting CTV? Also yes.
I think the decade from 2020-2030 will be the decade for CTV. At the moment, probably 80 percent of TV budgets go to linear TV, and 20 percent onto CTV. By the end of the decade I think that equation will flip over: 80 percent will be in CTV and 20 percent in linear.
Do you see any inertia when it comes to investing in interactive formats by buyers?
I think it’s still a work in progress, but there are multiple tailwinds. There’s the manufacturer piece that I mentioned which will catch up, as the base layer of technology catches up. And as consumption moves towards CTV more and more, that will have a big impact too. So there will be a pivot of technology, a pivot of content, and then consumers’ behaviour will be driven by those two things. And as that happens, advertisers will have no other option but to move their budgets too!
