Nick Cartier: The Future of Advanced Advertising on Smart TVs TV advertising is undergoing a complete revolution, primarily due to the rise...
TV advertising is undergoing a complete revolution, primarily due to the rise of online streaming services and the changing behavior of consumers in the way they consume content. This transformation is further fueled by the advent of internet-connected TVs (CTVs), which enable TV content and advertising to be measured in a closed-loop system similar to digital advertising. Alongside these developments, artificial intelligence (AI) is set to accelerate and expand the scope of this transformation.
Traditionally, the TV industry relied on major national advertisers making large ad purchases based on "reach and frequency" to target specific consumer demographics and increase awareness. However, the shift towards streaming platforms like Hulu, Netflix, and Peacock, combined with the popularity of connected TVs, has made TV advertising as measurable as online search and social advertising. The emergence of self-serve TV platforms has democratized access to TV advertising, allowing many search and social advertisers to embrace TV as a growth-driving medium. This ongoing shift is reshaping the entire TV ecosystem.
AI will play a pivotal role in reshaping TV advertising yet again. With the help of AI algorithms, advertisers will be able to create TV-ready video ads simply by providing text inputs. These AI-driven algorithms will enable marketers to refine their ads and create multiple versions with various element-level differences, such as actor gender, color scheme, messaging, frame rate, aspect ratio, clothing worn, and more. Advertisers can then test these multiple ad versions on TV-buying platforms, receiving feedback on exposure-to-outcome metrics, which will help identify the most effective combinations of creative elements that drive better performance, such as increased sales or return on advertising spend (ROAS).
Furthermore, AI will be used to optimize ads for specific outcomes by leveraging all versions of ad creatives in conjunction with a wide range of non-creative variables, such as context, audience profiles, daypart, and frequency, among others. As creative development platforms merge with TV buying and optimization platforms, marketers will be able to create TV ads with unprecedented simplicity and leverage AI systems to optimize both creative and media buying using an extensive set of variables. This optimization approach, taking place at the intersection of creative and real-time/programmatic TV buying, will transform TV into an outcome-based medium rather than solely a reach and awareness medium. The unique attributes of TV, such as sight, sound, and emotion delivered on large screens with minimal distractions, will enable ads to have a higher impact and deliver better ROI compared to other advertising mediums.
AI is already driving the rapid transformation of TV advertising, and in the next few years, millions of advertisers will gain access to democratized TV buying consoles, allowing them to create, deploy, and optimize ads using AI. This shift will result in a new TV advertising landscape that can demonstrate its value in a fully measurable way. The future of TV advertising will be shaped by the convergence of technology and creativity, unlocking the potential for higher effectiveness and accountability in this evolving medium.
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Nicholas Cartier is a former member of Hulu’s corporate strategy team and founder in the OTT streaming sector. He regularly engages in fireside chats and publishes insightful articles, covering emerging trends in the ever-evolving landscape of Connected TV (CTV), OTT streaming, and advertising industries.
