Programmatic guaranteed (PG) and upfront deals have become the de facto way that CTV inventory is sold and executed, but the role of open real-time bidding (ORTB) is coming into sharper focus as the CTV space matures.
Upfronts and PG enable publishers to get predictable financial returns on their content while buyers get market isolation at a protected price. However, the lack of transparency resulting from the presale arrangement can have negative impacts for buyers, especially if the content they are running their ads against doesn’t achieve the expected viewership numbers.
While purchasing premium content from premium broadcasters through an open or biddable market isn’t realistic and the upfronts will never go away, biddable CTV has a big part to play in the future of this marketplace.
The challenge with the legacy IO model was that publishers were left to grade their own homework due to a lack of pre-transaction transparency and independent post-impression verification. As buyers gained access to more information, markets shifted to programmatic transactions. In turn, as buyers could better determine whether they were interested in the user and how much they valued the impression opportunity, media owners could increase their yield by capitalizing on market competition, both in open exchange and private marketplaces.
A continuously evolving TV landscape
As traditional linear TV buyers migrated into the CTV space and began purchasing CTV inventory en masse, it made sense that each party leaned into what was familiar to them: programmatic and predictability. Once CTV consumption (and inventory) surpassed that of linear, upfronts and PG became the de facto method in which CTV deals were sold and executed.
Programmatic is many things, but it’s definitely not a mechanism to deliver 100% fill from 100% bid rates, which is a core promise of PG. Utilizing ORTB as a way to help publishers best monetize unsold inventory and buyers reach their desired audiences effectively at dynamic market rates is the way forward. It provides transparency into the monetization opportunity – user, context, and content – and mechanisms for independent verification.
At its core, ORTB is about reaching the right audience at the right time on the right property for a fair price. Programmatic emerged to fill the gaps between sold and unsold available inventory, but ORTB continues to evolve to suit new needs.
What’s a scatter with you?
The scatter market is in essence a fancy term to describe any unsold inventory made available outside (and after) the upfronts. Regardless of a show’s success (or lack thereof), viewership is hard to predict, so media owners frequently withhold some inventory from the upfronts to ensure they can meet their commitments should viewership change.
While upfronts and PG ensure buyers market isolation and provide content owners predictable financial returns, there are a few holes in this approach. Fundamentally, the promise and potential of programmatic transparency is mitigated by the pre-sale arrangement. The publisher is still controlling when and where the advertisement runs. Of course the buyer has transparent insights, but these are all provided after the fact. When you think about it, doesn’t that harken back to the old IO world more than the “new-age” of programmatic?
While commitments have benefits, they also have consequences
Almost exclusively, the buyer has a pre-negotiated fixed rate, so if a show is wildly successful they are protected from market dynamics and the result is favorable pricing. However, what happens if a show doesn’t meet viewership expectations? In this scenario, the buyer is in essence overpaying for results they want from a particular audience or campaign.
Increasingly, we’re seeing that buyers would rather spend their ad dollars on a more captive, predictable audience, rather than risk that their budget will not be spent and the parties need to work through the makegood process. On the sell side, when a show outperforms its expected viewership or popularity, media owners seek to mitigate those fluctuations by monetizing the resulting unsold inventory.
How should a publisher best monetize unsold inventory? How can a buyer reach their desired audiences effectively at dynamic market rates?
Programmatic anyone?
Purchasing premium content from premium broadcasters all through an open or biddable market isn’t realistic and the upfronts will never go away, but make no mistake: biddable CTV is the new scatter. As live events, sports specifically, continue to grow, programmatic and adtech will follow familiar historical patterns and the amount of inventory available outside the upfronts will grow at a faster rate than the upfronts themselves.
Like most things in ad tech, old is new again, and I expect buyers to pick and choose what they determine to be the right time, place and user than trust that to 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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