Finding the Middle Ground for CTV Supply Path Optimization
A riff has emerged within the industry when it comes to the reality of connected TV (CTV) inventory. On one side, we're hearing many of the industry's ad tech providers — the ones that sit between CTV publishers and advertisers — tout the growing fragmentation and complexity of the space as a demonstration of the need for their services to connect brands and agencies to disparate supply.
On the other hand, brands and agencies are coming to the realization that more than 90 percent of premium CTV supply rests with no more than a few dozen CTV publishers, according to internal Tatari data from 2022, suggesting an opportunity to do away with the "ad tech tax" by prioritizing direct deals with the most important players. Supply-path-optimization (SPO) is widely discussed as a critical need as buyers look to get closer to the inventory they buy, with fewer intermediaries.
So, what's the reality of the current landscape? Can advertisers greatly benefit from working with programmatic partners who can help them tap into aggregated CTV supply? Or is the CTV space far more consolidated than certain ad tech players would have you believe?
Yes. And yes.
The reality is that the top 20 ad-supported CTV publishers account for 90 percent or more of premium impressions, according to Tatari. This means CTV inventory is far more consolidated than digital video, where supply is scattered across millions of sites that host video content. In other words, there's far less of a need for a complex web of DSPs, ad exchanges and SSPs sitting between the buyers and sellers of CTV inventory. Optimal SPO is achievable, believe it or not.
However, if a buyer were to conclude that the best path forward is to orchestrate individual direct buys solely with their desired top CTV publishers, they'd be wrong. There's a middle ground between the complex ad tech web that governs digital video and the bare-bones direct buying model that some are taking within the CTV space. Let's examine what that middle ground can unlock for advertisers.
Packaging
Let's start with the most obvious point: When a brand or agency buys directly from an individual CTV publisher, it's buying only that publisher's inventory. But likely, the advertiser wants more. It doesn't just want inventory around a single sporting event. It wants inventory around sporting events. It doesn't want inventory around a single cooking show. It wants inventory around cooking shows. You get the idea. By working with a CTV-focused SSP and an automation platform, advertisers can package a wide array of contextual content with a given focus into a single buy and measure and optimize across programming from multiple providers.
Frequency Capping
In a related vein, when advertisers buy direct from individual CTV publishers, they lose the ability to control frequency across different publishers. If ads are purchased directly via a publisher's app as well as a platform like Roku, the same audience could be targeted twice. This is a significant contributing factor to the ad overexposure issues currently plaguing the CTV space at large. But when working with a CTV-focused SSP, all the data needed for effective frequency capping is available and actionable across distributors.
Porting Over Insights from Linear
Then there's the matter of data and insights, specifically around where ads are appearing. To date, the tragic irony of the CTV space has been that, compared to its traditional linear counterpart, the information coming back to advertisers regarding their CTV purchases has been scant at best. That's a hard pill to swallow when it comes to "the future of TV."
But the reality is that the only way that publishers with CTV inventory can get consumer data is by owning the distribution channels. Instead, their content is spread across devices, apps, and platforms, all of which treat data differently. An SSP or ad server that works across distributors, however, can provide a unified view of where ads are running across devices, apps, and platforms, including — in some cases — linear channels.
Today's advertisers are right to be skeptical of a CTV buying model rife with intermediaries. But they mustn't jump to the extreme solution of handling all CTV buys as direct deals. By finding the middle ground with an SSP and ad server built specifically with the CTV space in mind, advertisers can gain efficiency within their buys while avoiding the pitfalls that come with cobbling together disparate direct deals.
The views and opinions expressed are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.
Daniel Elad is the chief strategy officer at TheViewPoint.