Addressing the Fragmentation of TV Advertising

By Daniel Church, originally appearing on ANA

Here, there, and everywhere.” Originating from a 1960’s Beatles song, it’s a commonly used phrase describing a situation that is all over the place, or that lacks continuity.

Today, it aptly describes the current state of the TV advertising market. Valued at approximately $87 billion in the U.S., TV has evolved considerably in recent years. Traditional linear still holds a major (yet dwindling) piece of the TV advertising pie, but, as we all know, streaming and connected TV (CTV) have quickly gained ground.

It’s no secret that there is tremendous opportunity and revenue at stake for media owners, programmers, and distributors. Unfortunately, however, the industry is beset by fragmentation and a lack of standardization. TV advertising (in every sense of the word) is a house divided, spread thin between varying business models, inoperable technologies, and disparate viewing platforms.

So, how did we get here?

Historically, linear TV advertising has been handled through direct negotiations and order management systems, which are designed to facilitate deals between networks and their advertising partners. Very often, this is initiated through the TV industry’s annual week of presentations, prosecco, and pizzazz: the Upfronts.

On the flip side, some streaming ads are sold through managed deals during the NewFronts (and increasingly, even the Upfronts). Most video advertising on CTV, however, is transacted and fulfilled programmatically; 87.2 percent of it to be precise.

TV advertising is fragmented in every way, from how it is marketed, sold, and delivered. Differences lie not just across these linear and CTV ecosystems, but even across and among smart TV manufacturers, networks, service providers, and their ad tech partners.

It’s here, there, and everywhere — with no uniformity, no consistency.

Addressability has been one major sticking point, and there have certainly been attempts to unify and sell omnichannel packages as a single unit. Some initiatives have received wide support, like Go Addressable, but we have yet to see anything with broad buy-in or significant market traction.

It’s somewhat reminiscent of what occurred when Google announced it was sunsetting cookies a while ago. Technology providers, data management firms, and everyone in between developed solutions that served their own — but not always the industry’s best — interests. Several years later, there is still no uniform, widely adopted solution that is regarded as the preferred vehicle for personalized digital advertising at scale.

The same dynamic has unfolded in TV advertising. Myriad players are trying to solve issues and challenges. Undoubtedly, this is a great step forward, but many different approaches are being taken, which only exacerbates fragmentation.

Solving for fragmentation necessitates a move toward interoperability.

If we take a step back and analyze the current state of TV advertising, it’s easy to see why fragmentation has developed and persisted over the past decade. The industry is straddling the old and new, and each party with a vested financial interest must put food on their table before serving the greater good.

There is a harmonious path forward, however, and reaching it requires the right blend of standardization, technology, and market education.

On the standardization front, independent bodies such as the IAB have a key role to play in developing common rules of the road – and in enacting measures that provide incentives for all players to get on board. It’s why collectives like the Advanced TV Commit group, as one example, are so critical.

When it comes to tech, it’s absolutely essential to get the plumbing right in convergent TV advertising. Unifying systems and screens require a set of interoperable technologies that are capable of blending platforms, business models, and delivery mechanisms. Modern ad sales and operations teams know convergence is the future (if not the present), and to capitalize on all of the exciting opportunities that convergent TV offers, sell-side ad tech infrastructure is a linchpin.

Lastly, education — as is so often the case in evolving industries — is paramount. On the buy-side, digital (i.e., CTV) and linear teams often remain siloed with each having a preferred way of transacting and a channel-specific remit. To help remove these silos, it’s incumbent upon the supply-side to drive awareness of all the potential opportunities and best practices that exist. If the buy-side remains a house divided in its approach to TV advertising, then the rest of the industry hasn’t done enough to advance the collective mission of uniformity.

Convergence is upon us, and the opportunity is “there” for the taking.

In short, there is tremendous potential for the TV advertising industry as we sit today. The technology to enable interoperability is in place, and efforts are being made to address gaps in standardization and market education.

As we look ahead to 2028, it’s likely that domestic TV advertising as a whole will surpass $100 billion in spend, undoubtedly a major milestone and a huge opportunity. The industry must rally and center its focus to getting “there,” instead of “here” or “everywhere” to best situate itself for accelerating convergence in the years to come.

The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Daniel Church is head of ATV product at Beachfront.