The Future of CTV is Programmatic and Biddable
The CTV marketplace is a hybrid of digital and linear media buying, and is in many ways a direct replacement for linear, with scarce, high-quality video inventory shown on the TV screen. However, it also has the data-driven, programmatic element of digital. Together, this is leading to the growth of biddable programmatic CTV as an important channel for buyers and publishers.
Programmatic CTV spend in the industry is projected to account for 50% of all CTV ad spend in 2021, with more and more of that revenue happening through upfront negotiations. Upfront deals allow buyers to lock in the commitment of quality content and high-value audiences without the restriction of fixed CPMs. It also enables media buyers to buy in the future, with the flexibility to make pricing and placement decisions later on via programmatic channels. Buyers get the peace of mind that they have reserved scarce, premium inventory with the added benefit of more control over how, when and at what price they transact.
For publishers, allowing buyers to transact programmatically on CTV inventory, including that reserved in upfronts, allows for not only an increase in the number of unique advertisers transacting with that publisher but may also increase the value of the inventory by allowing buyers more flexibility and control.
Programmatic Can Help Publishers Capture CTV Growth
eMarketer is predicting that upfront spend on CTV will hit almost $6 billion in 2022, a 32% increase over 2021. Programmatic spend – while allowing for incrementality and diversification of buyers – may bolster upfront spend as well by allowing buyers to make commitments upfront but transact in an RTB environment.
Leaning into CTV programmatic advertising, publishers also open the door for higher total spend in the future, as advertisers will have had the ability to optimize their spend throughout the year, potentially seeing higher performance than if they had committed to fixed CPMs and fixed placements.
Programmatic buyers are measured on the success of the media buys based on efficiency goals and eCPMs. This is true for most programmatic teams who are also buying CTV. For strong CTV performance, buyers will be more likely to reward publishers with additional budget to support the success of their goals. The dynamically biddable CTV approach allows buyers to make assessments in real time on the performance of their campaigns, allowing them to increase bids as necessary or apply more budget as needed.
The evolving reality points to media buyers who want the reach of linear and the flexibility of digital in a scarce, premium environment. Once they see they can get it, pressure will be on for publishers to give them even more flexibility and control, not less. The good news is that high performing inventory will actually yield better results through biddable markets than static upfront contracts. Publishers who portray themselves as delivering “biddable TV” – high-quality, TV-like environments that can solve for performance goals via RTB buying at scale – are well positioned to capture more loyal brands over time.
