9 Questions DSPs Need To Answer To Prepare For The Future Of Programmatic OTT

This article is sponsored by Xandr.

As OTT continues to gain popularity, the industry is developing a road map of improvements that will need to be completed before advertisers and publishers can truly achieve programmatic success.

Just as many SSPs have begun to make changes to support OTT, DSPs must also make substantial investments to fully realize the promise of programmatic for TV and capture their share of the growing video market. At the top of the list, greater support for ad separation and large bid requests could prove crucial for DSPs in the new TV environment. Without these advancements, DSPs risk being left behind by other options better positioned to deliver on the evolving expectations of buyers and sellers.

Long-form video inventory presents a unique programmatic challenge

Long-form video – typically longer than 10 minutes in length – often contains traditional TV-style commercial breaks. These ad pods feature multiple, back-to-back creative placements – usually from a variety of different advertisers. For programmatic players, this format introduces a set of challenges not found in other digital formats.

First, due to the growing prevalence of buyers and sellers demanding competitive separation and frequency capping, bidders can no longer treat each slot in an ad pod or user session independently. Instead, they must consider how one bid will affect the next and change their strategies accordingly.

For example, a publisher may enforce competitive separation via their SSP or ad server, limiting a category or brand to a maximum of one slot per pod or per session. However, this information is not typically communicated on the bid request, since it is not known up front which creatives will be served. As a result, a DSP is free to bid with the same ad five times for five slots, but with typical competitive separation rules, such a strategy could win at most once. In this all-too-common scenario, the DSP’s bidding strategy leaves 80% of the opportunity on the table.

Many DSPs do not yet have the architecture to apply a programmatic strategy across several impressions, much less a multi-hour viewing session. Moving forward, solving for this problem will be the key to achieving programmatic OTT success. The most straightforward solution is the development of an algorithm that can take into account the reality of competitive separation and frequency capping, and then select a diverse set of creatives from a variety of brands and categories for each video stream.

But even with the right algorithm in place, DSPs will face additional challenges. Publishers will expect to be able to request multiple ad pods in advance, whether for user experience reasons, technical limitations or both. Consequently, DSPs may receive gigantic bid requests containing dozens of ad slots and potentially hundreds of deals. If they are unable to process such large requests, they stand to miss out on an entire stream’s worth of premium ad inventory.

Next steps for DSPs

While the current economic climate calls for quick fixes to keep spend flowing, conversations regarding more permanent solutions are already underway. Forward-thinking organizations, including Xandr, are working with DSPs to develop new OpenRTB signals that better communicate ad pod information.

Additionally, they are looking at new ways to shrink the size of bid requests and navigate situations where publishers request a large number of ad slots in advance. Continued experimentation in the coming months will play a critical role in developing programmatic solutions that deliver the best results for both buyers and sellers.

Until then, DSPs who want to get ahead of the programmatic OTT boom can begin preparing for the future now. Here are nine diagnostic questions that will point you in the right direction:

1. Are you able to receive an entire ad pod in a single request, or do you prefer it to be split up?
2. How do you track which impressions belong to which ad pods and user sessions, especially across multiple requests?
3. Are you able to bid intelligently on an entire ad pod to maximize your win rate, taking into account possible downstream frequency capping and competitive exclusion rules?
4. How do you plan to handle very large requests? Is there a limit to what you can handle?
5. How can you work with your partners to stay within the defined bid limits? Can those limits increase over time?
6. Have you considered running a programmatic OTT test with your preferred partners to surface problems, using a predefined budget and inventory?
7. Are you working with your partners to develop OpenRTB signals that will help identify and optimize long-form video inventory?
8. Would you be willing to return multiple bids per slot to maximize the chances of winning in the ad server?
9. Are you using the most direct, cost-effective, and transparent path to supply available?

With prudent attention to their long-form video road map, DSPs can help both buyers and sellers capitalize on the growing opportunities presented by programmatic OTT while, at the same time, creating positive experiences for a burgeoning segment of TV consumers.