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Why Power Will Reside with CTV Publishers, Not Advertisers

Dave Morgan
Dave Morgan  |  Executive Chairman
Updated: Jan. 11, 2023
Published: Jul. 06, 2022

Connected TV advertising will not be written by real-time bidding machines. As much as folks try to retrofit programmatic platforms built for the world of digital banners, social and search to handle the fast-growing CTV ad market, it’s not going to take.

Yield, relevance and reach will be the drivers of CTV ads’ future, not real-time open auctions and bid coverage. That means that probably 95% of the tech stack that powers the real-time programmatic world won’t be needed

In the world of CTV advertising, the power resides with publishers, not advertisers. Why? Because the supply of premium CTV advertising inventory (exclusive audience attention to a large screen) is scarce and precious, the opposite of digital banner inventory, which is plentiful and commoditized.

With scarcity ruling, publishers will increasingly seek advertisers that guarantee future buys at premium prices, or impression-based pricing (just as they do in linear TV’s upfront and scatter markets). They will curate those ads, recognizing that bad ads can chase away viewership.

CTV publishers will be less interested in supporting the needs of performance-based advertisers (last-second buys, retargeting and cost-per-click or cost-per-lead pricing), because brand advertisers will be comfortable prepurchasing significant portions of the inventory just as they do in linear TV. Those advertisers care much more about reach, relevance, frequency control and issues like viewability and ad separation.

Of course, CTV advertising will have plenty of response-oriented marketers, and techniques like retargeting and closed-loop optimization will be key tools of theirs -- but those marketers will find that they have to fit themselves into the CTV publishers’ ecosystem and rules. Unlike the world of digital banners and digital video, it won’t be the publishers trying to fit into the performance marketers’ ecosystem and rules.

What do you think? Will the CTV ad world be as different from digital banners and digital video as I’m predicting?

Find out how Simulmedia’s unique TV+® platform for truly cross-channel TV advertising provides unified access to premium linear and CTV inventory across all networks and publishers. Request a demo or email us at advertise@simulmedia.com.

An earlier version of this blog was originally published by MediaPost.