Biddable CTV is the New Scatter

Automated guaranteed trades (PG) and upfront trades have become the de facto way to sell and execute CTV inventory, but the role of real-time open bidding (ORTB) is coming into sharper focus as the CTV space matures.

Upfronts and PGs enable publishers to earn predictable financial returns on their content while buyers gain market isolation at a protected price. However, the lack of transparency resulting from pre-sale arrangements can have negative impacts on buyers, especially if the content they are running their ads on does not achieve the viewing figures expected.

Although purchasing premium content from premium broadcasters through an open or biddable marketplace is not realistic and upfronts will never go away, biddable CTV has a big role to play in the future of this market.

The challenge with the old IO model was that it was left to publishers to evaluate their own homework due to a lack of pre-transaction transparency and independent post-impression verification. As buyers gained access to more information, markets turned to automated transactions. In turn, since buyers can better determine whether they are interested in a user and how much they value the exposure opportunity, media owners can increase their revenues by taking advantage of market competition, whether on open exchanges or private markets.

The television landscape is constantly evolving

As traditional linear TV buyers moved into the CTV space and began buying CTV inventory en masse, it made sense for each party to lean toward what was familiar to it: programming and predictability. Once CTV consumption (and inventory) surpassed linear consumption, upfronts and PGs became the de facto method by which CTV trades were sold and executed.

The mechanism is many things, but it is certainly not one to deliver 100% fill from 100% quote rates, which is PG’s core promise. Using ORTB as a way to help publishers better monetize unsold inventory and buyers reach desired audiences effectively and at dynamic market prices is the way forward. It provides transparency regarding the monetization opportunity – user, context and content – ​​and independent verification mechanisms.

At its core, ORTB aims to reach the right audience at the right time on the right property for a fair price. It emerged programmatically to bridge the gaps between available sold and unsold inventory, but ORTB continues to evolve to fit new needs.

What’s scattered with you?

A dispersed market is essentially a fancy term to describe any unsold inventory that is made available outside of (and beyond) introductions. Regardless of a program’s success (or lack thereof), viewership is difficult to predict, so media owners often withhold some stock from leads to ensure they can meet their obligations if viewership changes.

While intros and PGs ensure market isolation for buyers and provide content owners with predictable financial returns, there are some holes in this approach. Essentially, the promise and potential of programmatic transparency is diluted by pre-sale arrangements. The publisher still controls when and where the ad is shown. Of course, the buyer has transparent insights, but they are all presented after the fact. When you think about it, doesn’t this harken back more to the old world of input and output than the “new age” of programming?

While commitments have benefits, they also have consequences

Almost exclusively, the buyer gets a fixed, pre-negotiated price, so if the offer is a huge success, he or she is protected from market dynamics and the result is favorable pricing. However, what happens if the show doesn’t meet viewers’ expectations? In this scenario, the buyer is overpaying for the results they want from a specific audience or campaign.

Increasingly, we’re seeing buyers prefer to spend their advertising dollars on a more predictable audience, rather than risk their budget not being spent and parties having to work through the process of making good. On the selling side, when a show outperforms expected viewership or popularity, media owners seek to smooth out those fluctuations by monetizing the resulting unsold inventory.

How should a publisher best monetize unsold inventory? How can a buyer effectively reach their desired audiences at dynamic market prices?

Programming anyone?

Buying premium content from premium broadcasters through an open or biddable marketplace isn’t realistic and upfronts will never go away, but make no mistake: biddable CTV is the new scatterer. As live events, and sports specifically, continue to grow, programmatic and ad technology will follow familiar historical patterns and the amount of inventory available outside of the intros will grow at a faster rate than the intros themselves.

As with most things in ad tech, old becomes new again, and I expect buyers to pick and choose what they decide is the right time, place and user rather than trusting the upfront process.

[Editor’s note: This is a contributed article from OpenX. Streaming Media accepts vendor bylines based solely on their value to our readers.]

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