“We are in the Wild West days of advanced TV,” says Jordan Linville, regional VP of Advanced TV at PubMatic, the programmatic innovator whose new header bidding solution, OpenWrap OTT, was released this month. The sudden and rapid growth of CTV and OTT—accelerated further by the increase in streaming subscriptions due to the COVID-19 quarantine—is a huge opportunity for brands to reach their target audiences in an addressable way. However, the proliferation of inventory, the growing collection of devices on which to watch, and the lack of established standards and processes means that the industry is learning and building in real-time. “With any emerging format experiencing this kind of growth, there is going to be a steep learning curve. That’s ok— we're all on it,” says Linville. “The goal is to move forward collectively to identify both the limitations and the opportunities and to bring those opportunities to market.”

The limitations seem clear. First, Linville says, “as buyers have looked at different channels and different platforms to buy through in today’s waterfall model, we have faced extreme inefficiency. It is very tedious. This is similar to earlier experiences with display advertising, where you could be the highest bidder but that didn’t mean you’d win, or even see, the bid.” And though the move to programmatic underscores the fact that, as Linville notes, “we all want a fair, equitable auction where the buyer who has the most valuable bid for an impression wins, that’s not the world we’re in yet.”

“We haven’t seen consistent categorization around content that makes it easier for an OTT buyer to say, ‘Yes, this is exactly what I want to bid on.’”

Add to this the need for agility and flexibility, which is complicated by challenges in frequency capping, competitive separation, and brand safety. “As with any Wild West scenario,” Linville says, “your standardization—or the lack thereof—is pretty extreme. We haven’t seen consistent categorization around content that makes it easier for an OTT buyer to say, ‘Yes, this is exactly what I want to bid on.’ You can only fully achieve the flexibility and targeting inherent to programmatic when you reach that state.”

But until then, Linville says, “there is going to be a huge, huge part of the market that’s just not comfortable.”

We’re All Consumers

Programmatic media brings the promise of true audience-based buying to television. However, traditional television, also known as linear TV, is a well-established industry with certain expectations, processes, and standards. For linear TV buyers, Linville says, things like competitive separation and frequency capping are “table stakes. It’s 50 years of learned behavior, and as an industry, programmatic needs to adapt to that paradigm because it’s very firmly set.”

Linville believes the reasons these rules exist are clear, especially for people, like himself, whose involvement with TV includes watching it. “Most of us are advanced TV consumers,” he says.  “We’re sitting there watching, and it hits home when you see the same ad for the fourth time and think, ‘Why can’t we do this better?’ It’s easy to understand it on a very personal level.”

This appreciation for buyer—and consumer—pain extends to other issues such as latency, which, Linville adds, will be even more palpable as sports, sidelined by COVID, makes a return and moves more into streaming. “If you have to cache video advertisements hours in advance,” he says, “that can cause challenges for a real-time auction.” Not meeting that challenge “is a reason some of the inventory has remained in the ad server and not in the programmatic auction.”

“Nobody wants a bad user experience. A publisher would rather not show an ad than risk having a bad user experience.”

Preserving the User Experience

Latency issues, coupled with a lack of competitive separation, limited frequency capping, and questionable brand safety have combined to undermine the user experience. “This is where everyone should be aligned,” Linville says, “The agency and the advertiser, the publisher, the consumer—nobody wants a bad user experience. A publisher would rather not show an ad than risk having a bad user experience.”

In large measure, it’s this focus on protecting the user experience that drove Linville and his colleagues at PubMatic, over the course of the past year, to develop technology to erase the latency, guarantee the competitive separation, cap the frequency, and, at the same time, ensure a fair and efficient auction, whether ads are being shown alone or as part of an ad pod. As PubMatic works to tame advanced TV’s Wild West by providing the necessary connections through its new OpenWrap OTT product, its overarching goal, Linville says, is “to democratize all video, whether it’s from DSPs, ad servers, or exchanges into a unified server-to-server auction.” What’s critical, he adds, “is to mirror the benefits of linear from a measurement, attribution, brand safety, and competitive perspective while simultaneously improving auction efficiency.”

Underlying it all, he notes, is what he calls “the trust component.” As he puts it, “You can have cutting-edge technology and great inventory, but there will always be an incentive to look the other way on questionable inventory. A buyer needs to trust the gatekeeper—the supply side platform—to uphold the standards and processes around inventory quality.”

OpenWrap OTT was developed as a clear response to frustrations expressed by advertisers and agencies, but, Linville cautions, the situation it’s addressing is continually evolving. “Everyone is still learning and figuring out what will work best for them,” he says. “Agencies and advertisers know this is the direction that consumers are moving, specifically with their time and attention. There’s a need to understand what’s possible and where we need to go as an industry. And there’s an education element that our team is bringing to this.” As marketers determine the methods and means of OTT and connected TV advertising that are right for their brands and businesses—navigating the linear versus programmatic divide—the technology and processes that drive this buying will continually improve to meet buyers’ needs. “It will be an evolution.”

Next week we’ll look at how these issues are playing out for publishers—and some of the unique needs they’re facing as the industry continues to change.