Amelia Ward, Senior Buyer Development Director, ANZ at Index Exchange
Eleven million Australians consume video content on their TV screens daily. Whether it’s via catch-up TV or streaming services, audience growth continues across all digital screens, but primarily on the largest screen in the house. The convergence of linear and digital has created a new type of consumer: one with cross-device viewing behaviours, and the desire for seamless and personalised advertising experiences.
As a result, marketers are funnelling more video ad dollars into digital channels in a bid to chase audience attention, relying on technology to deliver relevant ads that consumers are willing to engage with. However, the current ad experience is overshadowed by an inefficient delivery mechanism, one that doesn’t solve for frequency capping and delivers repetitive ad experiences for audiences. We’ve all experienced it, and know how it can affect the consumer experience.
The continuous advancement of channels such as connected TV (CTV), coupled with fragmented consumer attention, is driving several challenges in our industry. Luckily, programmatic has the opportunity to deliver a synchronised, efficient, and personalised ad experience for consumers, no matter the screen. In order for this to become a reality on both the buy and sell side, the programmatic industry needs to innovate.
The CTV buying model needs a shake up
There are two key buying strategies for CTV. One is “TV extension,” where the CTV buy acts as an extension of linear TV trading. With supply controlled by the big four broadcasters, the demand for premium inventory means that key media buyers are competing for a share of voice across a select supply pool and logged-in audiences. The other strategy is “digital first,” where CTV is a core channel within the digital mix and is used as part of an omnichannel strategy. Brands that employ this strategy are usually looking for younger, hard-to-reach, or light TV-viewing audiences, and don’t always run linear TV campaigns.
However, CTV advertising remains a big focus for marketers, and the investment in technology coupled with the strength of content will be pivotal in differentiating local and global media owners. In order to maximise the efficiency and effectiveness that programmatic delivers, ad tech needs to close the gap between the needs of media buyers and that of media owners.
Currently, in Australia, media buyers purchase inventory via programmatic guaranteed (PG) which is a mechanism that guarantees fill rates for inventory but doesn’t provide the efficiency and targeting that unified bidding solutions can afford. Media buyers purchase their ad spots based on the linear TV upfront buying structure, limiting the number of marketers that can lean into CTV ad buys, and adding a layer of resourcing and monitoring requirements on the buy side.
Media buyers are stuck chasing waterfalls and bidding in a categorised pecking order, rather than having the opportunity to present simultaneous bids as they could in a unified auction. In order to facilitate a fair auction and establish diversity of demand, it’s important to ensure that technology supports simultaneous unified auction, priority, and direct deals.
From an addressability perspective, the main mechanism for activating today is using broadcaster's first-party audience data. In order for marketer data enrichment and trading, there needs to be standardisation across the industry around audience measurement and targeting definitions.
Programmatic innovation will drive an efficient and addressable CTV future
A dynamic CTV marketplace can replace inefficient inventory reserves, increase transparency, and drive transaction costs down. Focusing on a data-rich market can renew upfronts and increase competition for premium supply, while preserving the content integrity and valuable relationships that have fueled TV for decades.
Programmatic innovation is the answer to delivering a new era of efficiency for CTV that will be instrumental in delivering scale, addressability, and a standardised approach to signalling the availability of podded supply.
It’s time for a CTV shake up. Similar to what header bidding did for display, employing unified auctions in video environments allows media owners to regain control of their inventory, maximise yield, and simultaneously provide more bidding opportunities for marketers.
More importantly, the introduction of specifications like OpenRTB 2.6 are a huge step forward for digital advertising as they account for the intricacies of TV within a programmatic environment. The new specifications allow media owners to present their inventory more accurately and give both digital and TV media buyers the flexibility to respond to bids in a way that will maximise their chances of winning the auction. Better yet, the specifications introduce more transparency, flexibility, and control to programmatic buys.
Ultimately, working together as a market to bring programmatic innovation to CTV and Broadcaster Video On Demand (BVOD) will allow media buyers to target their bid responses, activate valuable data, minimise duplicative ads, and control frequency. All while benefiting from the targeting and measurement capabilities that only programmatic mechanisms can offer.