Complexity and Congestion in the CTV Market is annoying ad-buyers

In the current climate of connected television (CTV) negotiations, brands are advocating for streamlined programmatic supply paths that minimize the intermediaries between buyers and sellers. This trend is highlighted by six media buying sources in discussions with ADWEEK.

Jay Friedman, CEO of Goodway Group, emphasizes the value of efficiency, stating, “The publishers that stand to gain the most from us are those who cut down on excess and needless fees.” This sentiment reflects the growing preference for supply path optimization (SPO), which has become increasingly popular in open web programmatic, allowing buyers to reduce ad spend wastage and secure more premium ad placements.

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Historically, SPO was less significant in CTV, where purchases were predominantly made through direct insertion orders rather than programmatically. However, as of May 2023, PubMatic projected that a majority of CTV transactions would still be conducted manually.

The issue of fragmentation in supply is becoming more pronounced as streamers release more inventory for programmatic purchase and adtech firms vie for a share of the profitable CTV budgets. This competition raises concerns about media dollars being consumed by ‘tech taxes’ and allocated to less desirable inventory.

The complexity of CTV’s buyer-seller pathways is daunting, with research from MiQ revealing up to 114 different supply paths for the same TV application. Alarmingly, the cost of inventory can fluctuate by as much as 250% across these paths. The CTV market’s fragmentation is exacerbated by intricate sales rights agreements, leading to multiple media companies marketing identical inventory.

MiQ’s global head of product, Lara Koenig, notes that the issue of fragmented supply paths became apparent towards the end of 2023, following a period of experimentation with additional tech partners by CTV publishers.

CTV advertising is still preferred over that of legacy TV

Despite these challenges, agencies still favor programmatic CTV purchases for their organizational benefits, broader reach, and technical features like frequency capping. However, the need for efficiency in these automated processes is paramount.

Buyers are seeking transparency and aiming to eliminate unnecessary tech partners and their fees. Some express a desire for programmatic guaranteed deals that bypass demand-side platforms, thus avoiding additional costs.

Matthew Kramer of Media.Monks and Mike Bregman of Havas Media Group both stress the importance of working with supply-side platforms (SSPs) that offer clarity on campaign costs and the proportion of spending allocated to working media versus tech and data fees.

While the proliferation of supply paths in CTV can be seen as problematic, Koenig suggests that it’s not entirely negative. A diverse range of partners can prevent price inflation and encourage the exploration of new strategies. Nonetheless, this diversity also complicates the media buying process, demanding a higher level of expertise and acceptance of the inherent difficulties in professional media buying. As Friedman concludes, embracing these challenges is essential for the industry’s progression.

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