Broadcasters and brands love the idea of applying digital targeting to connected TV ad campaigns.
But there are still roadblocks stopping CTV advertisers from fully embracing programmatic, including price and transparency (or the lack thereof).
Despite the eagerness of CTV advertisers to buy programmatically, agencies still need “more fluid execution” from media companies, said David Campanelli, EVP and chief investment officer at Horizon Media, speaking at Paramount Advertising’s TV Now summit in New York City on Tuesday.
In other words, Campanelli said, programmers need to make it easier for buyers to shift budgets from direct deals into programmatic bidding because it’s more cost-efficient, which also means higher inventory yield for programmers.
Rethinking the model
Specifically, supply consolidation will help CTV advertisers capitalize on programmatic.
Programmatic CTV is complicated because biddable auctions were designed so publishers can sell impressions, not entire commercial breaks, said Jon Mansell, VP and US head of video demand at Comcast-owned FreeWheel, who also spoke at the event.
Bidding on impressions across multiple CTV publishers generates a fair amount of bid duplication and ad repetition.
Advertisers commonly bid for the same inventory in multiple demand-side platforms. But because critical information, such as a brand’s name and vertical, is often missing from bid requests, programmers might allow ads to repeat in a short time frame. (Hence streaming’s over-frequency problem.)
Another obstacle with programmatic – particularly with biddable programmatic – is price. In some cases, publishers charge buyers a hefty fee to transition upfront or direct budgets into programmatic channels, Campanelli said.
Programmatic platforms agree that cost can be prohibitive.
In the case of demand-side platforms, “tech fees have been so substantial, it’s hard [for some advertisers] to justify the shift into the programmatic ecosystem,” said Mike Evans, VP of demand facilitation at Magnite.
Programmatic pragmatics
Clearly, programmatic for CTV looks and feels quite different compared with how it works in the online ad ecosystem.
To make programmatic work effectively for streaming, the CTV ad industry must “restructure how programmatic functions [in CTV],” said FreeWheel’s Mansell.
And “restructure” is code for “consolidate.”
One obvious example is the trend of supply-side platforms disintermediating demand-side platforms – and vice versa – which would explain the industry’s recent focus on supply-path optimization.
If advertisers buy inventory from fewer platforms, Magnite’s Evans said, they can reduce their ad tech tax and improve frequency capping by centralizing their buys. The opportunity for efficiency is why many agencies are using more direct paths to access inventory through demand- and supply-side platforms. (Think The Trade Desk’s OpenPath and Magnite’s ClearLine.)
But consolidation doesn’t always have to mean disintermediation.
In many cases, using just one centralized ad server can be enough to improve cost efficiency and frequency management by centralizing where campaign delivery and measurement happen, if not the ad buying itself, Mansell said.
And brands are making moves to consolidate their ad tech.
Over the summer, for example, device and software manufacturer Lenovo chose to enlist a new primary ad server rather than continue to divide campaign activations between the multiple ad servers that its media agencies were already using.
A centralized ad server can also help solidify a more direct path between buyers and legitimate resellers authorized to distribute a publisher’s supply, Mansell said.
But whatever flavor it comes in, Mansell said, consolidation has to happen before programmatic can be a cost-effective way to advertise on streaming TV.
