"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.
It’s unclear what the future of TV ad buys will look like in connected TV. Since much of TV inventory — including much of CTV — is reserved in the upfronts each year, will programmatic auction-based buying eventually be used in CTV as it is for online digital?
Major content owners like Disney and NBCUniversal are making big investments in automated platforms. Disney recently unveiled its Disney Real-Time Ad Exchange, or DRAX, a premium video header bidding solution, and NBCU launched its One Platform last year and continues to build and test new tools and capabilities.
And so, we asked the experts: “Is the future of CTV biddable? Why or why not?” Most seem to agree that it will be, although to what extent seems to be up for debate.
- Ben Hovaness, SVP of marketplace intelligence, OMG North America
- Jen Soch, GroupM, executive director, specialty channels, GroupM
- Joe Cady, SVP of strategy and development, NBCUniversal
- Meredith Goldman, VP of publisher advertising solutions, Roku
- Matt Barnes, senior director of programmatic sales, Disney Advertising Sales
- Aaron Letscher, VP of programmatic and audience products, WarnerMedia Ad Sales
- Leo O’Connor, SVP and head of programmatic advertising, ViacomCBS
Since the early 2000s, ad auctions have been used to transact increasing volumes of media across a widening variety of channels. Auctions have a great number of virtues — yield maximization for sellers, better targeting for users, improved outcomes for advertisers, and an all around more dynamic marketplace. If one is looking for proof that auctions can be the core of an ad sales business, we think the commercial success of Google and Facebook should lay any doubt to rest.
In 2021, we see the same future for CTV. The marketplace is more complex than those of the walled gardens due to the intermediated nature of programmatic buying, with a wide variety of deal types — fixed-price, dynamic-with-floors, no-floors, post-auction price reductions (PAPR).
And a lot of inventory is still transacted on an [Insertion Order] basis. But we see the fundamental strength of the auction model eventually coming to dominate transactions in this space, as it has in the worlds of search, social, and various other digital ad formats. We also see it as something to look forward to, because it is not written anywhere that auctions must undermine buying clout.
I believe CTV will continue to be purchased via biddable and non-biddable methods. I see a side where CTV will be about being addressable with advanced targeting. Likely purchased by biddable methods, brands will look for heavy optimizations and flexibility. I see another side where CTV will be used as a strong brand first platform. Purchased by Insertion Orders, programmatic guaranteed or preferred deals, brands will search out high impact units, contextual alignment and the increasingly important tentpole events and sponsorships.
CTV’s future will not be all biddable. We will need direct buying where pricing would be fixed and purchased outside of a biddable auction.
The growth of premium content on CTV provides the best possible medium to deliver an advertiser’s message. A biddable environment enables more advertisers of different sizes to reach audiences through CTV, so we believe that bidding is going to become more prominent. CTV allows for publishers and brands alike to tap into an array of advanced advertising and targeting capabilities, making it even easier to get the right message to the right audience on the right platform at the right time. I envision this ecosystem becoming more and more attractive across the board.
We’ve always said that all TV advertising will be streamed. We also believe that TV advertising will be automated and biddable, but will have a trajectory that’s different and more expansive than digital. Streaming TV advertising has the unique ability to couple top-of-funnel needs of TV buyers with the performance needs of digital buyers. TV has always been about reach, and digital is about action. Streaming achieves both, and unlocks the first true full-funnel performance platform.
The immediate update required for biddable platforms to attract more TV streaming advertising is to leverage real-time data for incremental reach and frequency. As a premium supply source, there will be additional expectations that streaming TV publishers offer the same access to supply to programmatic demand as their direct ad sales teams. Biddable platforms that have identity at its core and leverage first-party consumer relationships across ad decisioning and attribution will have a clear advantage in attracting streaming TV advertising.
Over the last few years, we have seen tremendous growth in our programmatic business across programmatic guaranteed and biddable deals. As more viewers shift to CTV as their desired method of consuming content, we will continue to see the shift in our industry to programmatic buying. The benefits we see with automation, such as reach and frequency management and targeting, are some of the reasons why we expect programmatic sales to account for up to 50% of Disney’s addressable and linear revenue by 2024. Using a mix of programmatic transaction types is the future of CTV.
Yes, the future of CTV will be biddable – to an extent. Although I predict we’ll always see high-touch moments and tentpoles direct sold, like all media channels, marketers want scale and efficiency, so I predict patterns we saw in media planning and buying in digital over the past 15 years to continue in CTV.
But CTV has very distinct characteristics and challenges on the road to true automation. The clearest challenge for CTV buyers centers around audiences, where you see a patchwork of approaches, from syndicated research to building device graphs from bid-stream data. There are also myriad hardware, operating systems, and distribution relationships today in the connected TV space, which can make it difficult to scale and manage frequency across different channels.
I predict media owners and distributors with direct-to-consumer relationships and rich audience insights will be differentiated in that they can make deterministic connections with consumers, helping marketers to better understand their consumer and to unify buys on the front and back end.
However, the ad tech ecosystem must evolve its collective approach in the meantime to account for the lack of persistent identifiers in CTV. This means tuning bid strategies, algorithms and standardizing creative capabilities to account for the uniqueness of CTV, and not simply retrofitting strategies designed for web and mobile app environments.
The current state of CTV is biddable. As we look to the future, we will continue to see an enormous focus on direct programmatic transactions between marketers and publishers. There will, also, always be a place for reserved buying in premium CTV, especially in live tentpole events where sponsorships are sold on a slot basis.