Is programmatic CTV the future of TV buying?

The way consumers access TV content in Asia and globally has changed significantly over the past five years. The proliferation of smartphones, connected TVs, ad-funded TV channels, and broadcaster streaming services provides consumers with more ways to access the ever-growing library of TV content available. Up to now, connected TV (CTV) investment has lagged behind the audiences - but forecasts show that this is set to change.

As ad spend catches up with eyeballs, is programmatic CTV the future of TV buying?  

New premium inventory shines a light on CTV 

As programmatic becomes ever more ubiquitous it is not unreasonable to say that we’re heading towards a future where all advertising will become digital, and all digital advertising will be transacted programmatically. The news cycle of the past six months has reinforced this idea, with some of the world’s most premium content companies announcing plans for programmatic advertising to be a critical component of their growth strategy. 

Ad funded models from global players like Netflix, Disney+, and Warner Bros Discovery will drive significant increases in premium CTV inventory across the board. In addition, more premium, first run content will migrate from its traditional home on broadcasters to the new CTV platforms. This trend has been particularly prevalent in Asia with some hugely successful local language content being showcased on CTV. As eyeballs follow the content, viewing on these new platforms will grow, making CTV an even greater priority for advertisers. 

Over the past two years, programmatic guaranteed (PG) has been the preferred route to market for many CTV buyers. This shines a light on the fact that in a fragmented market that commands high CPMs, relationships are key. As spend increases, we will see more of these direct relationships as buyers and sellers collaborate to discover the most effective ways to reach and engage audiences.  

Breaking down barriers to entry 

For smaller brands, TV has often been off the table due to high capital costs. Advances in programmatic CTV capabilities, specifically in open marketplaces, will democratise TV for those smaller brands by removing the need to commit to the minimum spends commanded by broadcasters. Programmatic CTV’s ability to target at a granular level, and the return path data available, will make it increasingly attractive to performance and direct-to-consumer (DTC) advertisers, who have hitherto spent huge amounts in social media. The opportunity to drive performance and brand metrics on the biggest screen in the home will be an attractive one. 

From a publisher's perspective, the growth of private marketplace (PMP’s) and open marketplaces will create more opportunities to monetise inventory outside direct deals, as well as generate leads for direct sales teams. The key to the growth of biddable CTV will be trust. Buyers of all shapes and sizes need to be confident that the platforms that aggregate supply have cast iron policies around brand safety, fraud and direct content owner relationships. Sadly, CTV will attract its fair share of unsavoury players, it is down to programmatic platforms to reassure the market that CTV will not go down the path that display took in the past.  

Measurement and targeting 

To date, measurement has been cited as one of the biggest barriers to the growth of CTV. Where advertisers are looking to CTV to help reach audiences that are difficult or expensive to reach via traditional TV, they need data to back this up. With CTV data sitting in multiple, siloed platforms, getting this data has been challenging to say the least. However, there are signs that things are moving in the right direction. There are a number of measurement businesses that are helping to track performance-based objectives on CTV. Typically, they look at upper funnel metrics, such as website visits post exposure to a CTV ad, but they can also look at other measures of ROI, including sales.  

Targeting on CTV can also be quite fragmented, with different platforms providing different data signals and different capabilities. Over time, this area will become more consistent, though much depends on how viewer ID’s are tracked, and how this fits in with privacy requirements. In the next year, we will see content and context data becoming more widely used. CTV media owners are starting to see the commercial benefits of passing content data signals to buyers in order to aid targeting and reporting. These signals have the opportunity to be far more consistent, particularly if the media owners adhere to the IAB’s OpenRTB standards around content taxonomies.  

How can we carve the best path for programmatic CTV? 

It starts with the advertiser. Changes in TV viewing behaviour will require changes in where and how TV advertising budgets are spent. We need to make it easier for advertisers to justify these shifts in spend and demonstrate that TV is still doing the great job it has always done, albeit over a more fragmented landscape and delivered programmatically. This will require a reboot to traditional TV thinking and planning, much collaboration and standardisation, and a certain amount of agility. Publishers are crucial to this process as they need to be justly compensated for their quality inventory, and working with advertisers and technology partners to deliver on measurement and targeting will be a huge first step. The opportunity is just too big for us not to.