Commentary
Predicting The Future Will Matter More In CTV Ads Than Optimizing In Real Time
- by Dave Morgan , Featured Contributor, August 29, 2024
There’s no question the future of TV advertising will be data-driven and automated, as well as increasingly streamed and optimized at the impression level.
Many digital folks assume this “programmatic” future for TV and CTV advertising will be real-time-bidded, much like what happened over the past decade in banners, social and web video. I don’t share that assumption.
Instead, I believe that while CTV advertising -- and much of linear as well -- will be digitally (programmatically) planned, bought, sold, measured and optimized, the real-time-bidded and optimized component will shrink, not grow.
Why? Because buying ads on CTV is about buying the full-screen attention of audiences. It’s not about chasing clicks on banners, though advertisers are increasingly valuing closed-loop measurements and attributions.
Since people and their attention are fundamentally scarce, we’re already seeing the bulk of CTV ad spend shift into private marketplaces and “programmatic guaranteed” buys, increasingly done by insertion orders rather than open bids.
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If more and more CTV ad money moves in “forward market” transactions (the term that The Trade Desk is giving it), here are some of the implications this will have for players in the CTV ad market:
- Fewer CTV ad transactions for real-time bidding
- Fewer intermediaries in CTV transaction
- Lower platform fees captured by DSPs & SSPs
- Higher data fees, with DSPs and SSPs fighting to capture them
- Less “scrapable” user/publisher data on open exchanges
- Growth in importance of verified identity data
- Growth in “walled garden” share of CTV ad transactions
There’s a lot to unpack in this list above, which I will endeavor to do in future columns. In the meantime, the biggest takeaway is that much of the value in the CTV ad market -- certainly for ad optimization -- will shift from real-time decisioning to forward market planning and commitments.
Predicting the future will matter more in CTV ads than optimizing the present. Are you ready for that?
This post was previously published in an earlier edition of Marketing Insider.
Dave, it's not a certainty that all---or most--CTV time buys will be made programmatically as a comparative handful of sellers control the vast majority of the ad GRPs. Why are we assuming that the sellers will simply hand over their GRP inventories to computerized bidding/buying systems? Also, with Nielsen's new "big data" rating service coming into play, the walled garden problem and multiple metrics confusion issues that are postulated will not pose many issues for traditional TV advertisers shifting ad dollars into CTV. They will get exactly what they now use in making linear TV buys for all CTV time sellers ---projected "viewer" impressions. If they want to "deduplicate" audieces between sellers ---simple Nielsen tabs will produce the desired reach and frequency data.
What will probably happen is that there will be several kinds of CTV advertisers and time selling approaches. One will be used by the tradiotional, more sophisticated national TV time buyers who will deal directly with a limited number of sellers for most of their impressions---and do it mostly the same way as they now do with linear TV buys. In fact sellers who have a presence in both venues will probably combine their time sales operations, instead of competing with temselves by treating CTV as a separate venue from linear.
Then there will be the other kind of advertiser---local marketers, search and diirect response advertisers, smaller, more selectively targeted brands, etc. who will probasbly go the programmatic route and have to deal with all of the problems this entails---if they even bother.
I suspect that the traditional TV buyers will account for at least 50%---maybe more---of CTV ad spend short term and who knows what long term.