Want Better Targeting And Lower Fraud? Avoid CTV Open Auctions

On TV & Video” is a column exploring opportunities and challenges in advanced TV and video. 

Today’s column is by Ruby Resendez, director of digital solutions at Stirista

Today’s CTV landscape offers marketers a new frontier for tapping into more personalized targeting and reach than traditional linear TV ads. And ad sales are following the buzz. 

According to Omnicom Media Group, the ad spend for connected TV (CTV) increased by 40.6% year-over-year in 2020 to more than $9 billion, “making CTV the fastest growing sector of the U.S. digital ad market.” eMarketer has projected that, in 2021, CTV ad spending hit nearly $15 billion, a 59.9% increase.

Marketers looking to reach these new audiences may be tempted to employ open auctions available through demand-side platforms (DSPs). Open auctions appear to democratize and simplify CTV ad buying because they let marketers define parameters for viewers or inventory, enabling them to place ads quickly and cheaply across the ad-supported streaming services.

But there’s a better way.

Server-side ad insertion isn’t ideal

Open auctions are risky. The emphasis is placed on price and meeting broad criteria. But it’s not uncommon for fraud and frequency issues to prevail. Ads may be shown in undesirable surroundings, to fake viewers in misrepresented inventory, or to the same audience on repeat. 

On the web, many of the terms, measurements, platforms and technologies used in open auctions are agreed upon. But CTV is still emerging and is a more complicated, fragmented market with many walled gardens.

For example, each streaming service has its own app. And for display, services are channeled through various platforms, such as Roku or cable systems. There are different standards for measurability, often depending on the app or platform. Fraud detection techniques are still trying to catch up. The IAB, for instance, has noted that invalid traffic detection developed for the web often doesn’t work well on CTV.

Additionally, server-side ad insertion (SSAI) is common on CTV. It knits ads with content for seamless insertion into a video stream. But SSAI spoofing has resulted in massive fraud that is difficult to detect. Ad measurement comes from those ad servers, but it’s possible for fraudsters to insert themselves into the servers and create fictional viewers. 

In April 2020, for instance, a massive ICEBUCKET bot operation was brought to light. Fraudsters impersonated over two million CTV viewers in more than 30 countries. And an SSAI-based CTV ad fraud scheme was uncovered early last year after it had scammed advertisers for as much as $50 million via fake CTV inventory.

Use the concierges for less fraud and better targeting

The best way to avoid fraud and less-than-optimal inventory in CTV: direct relationships. Buy curated packages from specific platforms or apps, use private marketplaces that offer verified households and devices or opt for DSP packages, including those provided by channel owners like Disney and Samsung Ads.

Beyond preventing fraud, concierge-directed ad buying also has another major advantage: advertisers can better target their ads with optimal frequency.

Ad placement in open auctions is often defined by broad criteria. But curated offerings – which often draw on info known only to data providers, platforms or channel owners – can target inventory from high-quality suppliers and publishers with more specific characteristics of viewing households. Think “high-end ZIP codes with consumers that watch lots of sports channels.” These offerings also help ensure high-quality placements and completion views and block fraud more easily.

Even though the viewing data is anonymized, curated offerings are more likely to offer sophisticated targeting of audiences that even exceeds what is offered on the web. That’s because CTV walled gardens have more specific data about users and their viewing habits. Trusted DSPs with strong frequency standards help avoid oversaturation. Packages that can target audiences in this way can also limit ad frequency, an important factor when ad repetition is common on many streaming services.

As CTV matures, avoid unnecessary risk 

Streaming services are fundamentally changing how TV operates for viewers and advertisers, but the CTV environment is still a work-in-progress. Open auctions are risky because of fraud, frequency and low-quality inventory. 

But marketers can avoid those risks and reap better targeting by using channels and packages curated to generate the best – and most reliable – bang for the buck.

Follow Stirista (@STIRISTA) and AdExchanger (@adexchanger) on Twitter.

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