How would CTV privacy regulation play out?

The news: Personalization is becoming the name of the game in connected TV (CTV) advertising. Major CTV players like Roku have struck deals with The Trade Desk to broaden their data pools in hopes that even more highly targeted ads will deliver greater revenues.

The Trade Desk itself is looking to get into the CTV operating system market, setting it up to have a significant advantage due to its wealth of personal data.

But the same privacy changes that have led to major shifts in other digital ad sectors could also come to CTVs. US authorities have started ramping up privacy regulation, and the FTC recently called for broad oversight of the ad industry, which will almost surely touch the nearly $29 billion advertising channel.

Preparing for privacy crackdowns: The immediate realities of privacy regulation in the US are uncertain due to the approaching presidential election, as neither candidate is guaranteeing that the current regulatory roadmap will continue. But advertisers should still brace themselves for potential restrictions in CTV marketing.

• CTVs have become a significant ad channel across the globe. CTV platforms and operating system providers are reaping meaningful benefits: Global ad revenues for platform providers are expected to reach $6.65 billion this year and $13.5 billion by 2029, per Omdia data cited by Variety, but signal loss and data restrictions could cause those projections to decline.
• The confused path to removing cookies from Google Chrome could provide some hints at how a CTV privacy crackdown could play out. Google announced its plans to phase out third-party cookies, but several delays and regulator complaints later, it is beginning to loosen up on that policy.
• The highly interconnected nature of CTV data could make pursuing regulation difficult, and advertisers have a strong argument for keeping the status quo: Consumers have relatively positive sentiment for CTV ads. A recent LG Ad Solutions report found that 70% of Asian American consumers feel CTV ads are more relevant than TV ads, and interactive formats also improve sentiment.

Our take: The uncertain future of privacy and digital advertising makes it difficult to plan ahead. But there are already developments underway that advertisers should monitor to avoid being left behind.

CTV platforms are already beginning to integrate privacy-oriented data collection and tracking tools. Unified ID 2.0, the privacy solution offered by The Trade Desk, is being implemented in some CTV platforms, and the company recently published instructions on how to integrate the technology. Using privacy solutions now can help keep advertisers ahead of the regulatory curve.