Connected TV (CTV) advertising is a rapidly growing segment of the digital advertising landscape. In recent years, CTV has gained significant traction, and eMarketer forecasts that it will continue to consume a larger share of total ad spend in the coming years, with US CTV ad spending projected to reach $40.90 billion by 2027. To stay ahead of the curve, modern marketers must understand everything there is to know about buying CTV ad inventory. In this comprehensive guide, we will dive into the world of CTV advertising, exploring what CTV ad inventory is, where advertisers can find it, how to buy it, and the challenges they may face.
What is CTV Ad Inventory?
Connected TV ad inventory refers to the available advertising space on connected TV platforms, typically in the form of 15 or 30-second ad breaks. Advertisers purchase CTV ad inventory to engage viewers in a lean-back environment, similar to traditional TV advertising, but with the added advantages of digital targeting and measurement capabilities. This inventory includes the slots for advertisements during CTV programs and streaming content.
Where Can Advertisers Find CTV Ad Inventory?
Advertisers can source CTV ad inventory from various providers within the CTV ecosystem. These providers include:
- Content Owners: Content owners, such as TV networks, production studios, streaming services, or entities that create or license content for CTV platforms, have the rights to specific programming. They offer ad inventory within their content to advertisers.
- App Owners: Streaming apps like Hulu, Netflix, and Crackle provide ad space within their content for advertisers to purchase.
- App Store Owners: App stores on Smart TVs or connected TV devices, such as the Roku Channel Store or Apple TV TVos App Store, enable users to download streaming apps. Advertisers can access ad inventory through these platforms.
- Carriage Deals: Similar to traditional TV, where networks like NBC sell ad inventory to cable companies, connected TV networks may have agreements with multiple parties for ad space. This allows various entities to access portions of the ad inventory.
For instance, consider AMC’s show “The Walking Dead.” AMC can sell a portion of its ad inventory for the show. Additionally, apps like Pluto TV may have the right to sell a part of the ad space within “The Walking Dead.” These apps can be downloaded from app stores like Roku, which may also have agreements to sell ad inventory for the same content. This complex web of the accords means multiple entities share the ad revenue pie for a single show.
How Can Advertisers Buy CTV Ad Inventory?
Advertisers have two primary methods for purchasing CTV ad inventory: non-programmatic and programmatic buying.
- Sponsorships: In sponsorship agreements, publishers guarantee premium inventory, such as first or last break ad slots, to advertisers. These are direct agreements where specific ad slots are reserved for advertisers.
- Direct Insertion Orders: Advertisers and publishers enter into direct insertion orders, specifying ad campaigns to run on the publisher’s inventory. These orders involve negotiated rates and impressions commitments over a predetermined period. While publishers have control, advertisers can provide strategic guidance.
- Programmatic Guaranteed: This method combines programmatic advantages with guaranteed inventory. Publishers commit to delivering a specified number of impressions, and advertisers agree to a fixed price. Unlike auctions, programmatic guaranteed reserves inventory exclusively for the advertiser. It automates the direct insertion order process, with advertisers paying a fee to demand-side platforms for automated workflows.
- Private Marketplace (PMP): PMPs are invitation-only marketplaces where select advertisers can purchase ad inventory from specific publishers. PMPs often have floor prices, ensuring publishers receive a minimum price for their inventory.
- Open Exchange and Real-Time Bidding (RTB): Open exchanges allow multiple advertisers to compete for the same inventory through real-time bidding. The highest bidder typically secures the ad impression. However, this method carries risks due to limited information about publishers.
Challenges of Buying CTV Ad Inventory:
Despite the growth of CTV advertising, several challenges persist, impacting the buying process:
- Lack of Transparency: Advertisers often lack transparency in the CTV advertising ecosystem. Multiple vendors can sell the same inventory, and they typically do not coordinate or communicate with each other. This lack of transparency leaves advertisers uncertain about where their ads are running.
- Less Control: Programmatic buying relies on algorithms and automated systems for ad placements. Advertisers may have less control over the specific posts and timing of their ads, potentially affecting ad performance and brand alignment.
- Brand Safety: Advertisers must ensure that their ads are displayed in appropriate and brand-safe environments. The lack of transparency in programmatic buying can lead to ads appearing alongside objectionable content.
- Ad Tech Fees: In the programmatic advertising ecosystem, multiple intermediaries add fees and markups to transactions. Advertisers and publishers may pay multiple markups for the same campaign, driving costs.
- Accurate KPI Determination: CTV advertising spans multiple platforms and publishers, making it challenging to measure campaign performance consistently and accurately. Ad tech vendors are developing robust measurement and attribution solutions to address this issue.
- Ad Fraud: The lack of transparency in the CTV advertising ecosystem makes it challenging to identify and prevent ad fraud effectively. Advertisers often have limited visibility into specific placements and inventory sources, making it easier for fraudsters to exploit loopholes.
Premium vs. Non-Premium CTV Inventory:
Premium CTV inventory typically refers to ad placements within high-quality, sought-after content, often from reputable publishers or premium streaming platforms. This inventory is usually hidden behind a paywall, signaling audiences are willing to pay for it. Premium CTV inventory is often sought after by advertisers for its quality and brand safety.
Non-premium CTV inventory, on the other hand, includes ad placements in less popular or niche content, often from smaller or independent publishers. This content may not have the same level of viewership or established brand recognition as premium content. Examples include independently owned Free Ad-supported Streaming TV (FAST) channels like Pluto TV.
Buying the Best CTV Ad Inventory for Your Brand:
To make informed decisions about buying CTV ad inventory, advertisers need both knowledge and technology. Platforms like Simulmedia’s TV+ can empower advertisers with predictive technology, integrations with numerous networks and publishers, and years of experience. Such platforms enable advertisers to reach their target audiences effectively across the CTV landscape.
CTV advertising is on the rise and offers unique opportunities for advertisers to engage audiences in a digital environment with the benefits of traditional TV advertising. Understanding the intricacies of CTV ad inventory, the various buying methods, and the challenges involved is crucial for marketers looking to navigate this evolving landscape successfully. Whether opting for non-programmatic or programmatic buying, advertisers must consider factors like transparency, control, brand safety, and the distinction between premium and non-premium inventory to make the best choices for their campaigns.