In an uncertain economic env. biddable CTV offers a solution for advertisers and publishers alike

Authored by Vijay Kundri, RVP, OTT & CTV, PubMatic

TV advertising is undergoing a tectonic shift from programmed to programmatic.

Globally, buyers are waking up to the benefits of biddable CTV – such as increased flexibility, and demand is growing for biddable marketplaces. But flexible CPMs aren’t the only consideration for TV advertisers – they’re also looking for improved transparency and first-party signals from publishers in the programmatic bidstream.

As TV dollars transition from IO, we will see a shift towards more transparency in programmatic CTV, and that is a shift that needs to happen.

Programmatic gaining popularity in CTV

Programmatic CTV gives advertisers flexibility, as opposed to locking money into insertion orders. In uncertain economic environments, biddable buying is something of a safety net -because buyers aren’t obligated to uphold a spend commitment. If a media campaign isn’t panning out to an advertiser’s performance expectations, they don’t have to continue spending against that campaign.

Currently, buyers are largely opting for programmatic guaranteed deals for biddable CTV. Programmatic guaranteed allows buyers to optimize their campaigns by securing scarce inventory in advance for a preferred rate.

Programmatic guaranteed deals are a security blanket for buyers – essentially, they follow the same business rules as an IO, but they are executed in an automated way. Programmatic guaranteed first became popular around 2014, when the industry realized it was a way to bend the rules on programmatic by pre-reserving inventory.

But the idea makes sense, and programmatic guarantee became the way to lock up the most premium inventory, including on CTV.

But some have started testing and are trying more private marketplaces (PMPs) and open auctions.

The benefits of a private marketplace for CTV buying

PMPs are a little different from programmatic guaranteed because PMP buys are not, guaranteed. But buyers like that PMPs can give them more control over what they’re buying and how much they’re paying for it.

PMPs come in two different flavors: fixed price and floor price. A buyer might choose fixed-price PMPs if they’re budget-conscious, for example, or otherwise don’t want to pay more than a specific amount. But another buyer might opt for a floor-price PMP because they’re not winning enough bids, and a price floor gives buyers the flexibility to bid more competitively and secure scarcer inventory.

Floor-price PMPs benefit both sides. Publishers can see higher closing CPMs, and buyers have a better chance of scaling inventory in line with their campaign goals.

PMPs vs. programmatic guaranteed

There’s value in programmatic guaranteed to reserve premium inventory and lock in high-value impressions. But it’s also valuable for buyers to have more control in a PMP over not just what they’re buying, but the price at which they’re willing to buy it.

The true power of biddable CTV will come from floor-price PMP executions. The essence of programmatic is to scale buys by giving advertisers the control they need to feel more comfortable expanding beyond guaranteed deals.

One way that publishers can make advertisers feel more secure with their buys is by sharing more content signals through the bidstream, including video genre and language, program ratings and content network or studio.

Aligning on transparency for CTV

Transparency on linear means buyers knowing what show their ad ran against and at what time. It’s realistic for buyers to ask for that same level of transparency on CTV too, and it’s possible to provide that information on streaming buys. In fact, CTV can generate more media transparency than linear because it uses first-party data to optimize CPMs.

While the standard taxonomy as to which types of data signals publishers can or will share in a bid stream is still evolving, the industry already has the tools to become more transparent. It’s just a matter of the buy and sell sides coming together and agreeing to transact media in a way that’s secure and creates a higher return on investment for both sides.

Transparency will help programmatic TV grow

Premium video buys aren’t just about knowing the network and genre of inventory. For buyers, a premium buy is about knowing that they’re buying against the content they want, which involves receiving content signals from publishers through the bidstream.

Programmatic helps scale premium buys, because if publishers share the signals that buyers need in the bidstream to feel more secure, buyers will become more comfortable buying against multiple supply sources in more open auction-like environments. They’ll realize they can scale premium investments in multiple ways, not just by making big investments in pre-reserved programmatic guaranteed.

For CTV, premium and scale are historically opposing forces. But by opening up more transparent signals to the industry, those forces can harmonize.

News in the domain of Advertising, Marketing, Media and Business of Entertainment