COMMENTARY

Predicting The Future Will Matter More in CTV Ads Than Optimizing in Real Time

• by Dave Morgan , Featured Contributor, 2 hours ago

There’s no question the future of TV advertising will be data-driven and automated, as well as increasingly streamed and optimized at the impression level.

Many digital folks assume this “programmatic” future for TV and CTV advertising will be real-time-bidded, much like what happened over the past decade in banners, social and web video. I don’t share that assumption.

Instead, I believe that while CTV advertising -- and much of linear as well -- will be digitally (programmatically) planned, bought, sold, measured and optimized, the real-time-bidded and optimized component will shrink, not grow.

Why? Because buying ads on CTV is about buying the full-screen attention of audiences. It’s not about chasing clicks on banners, though advertisers are increasingly valuing closed-loop measurements and attributions.

Since people and their attention are fundamentally scarce, we’re already seeing the bulk of CTV ad spend shift into private marketplaces and “programmatic guaranteed” buys, increasingly done by insertion orders rather than open bids.

If more and more CTV ad money moves in “forward market” transactions (the term that The Trade Desk is giving it), here are some of the implications this will have for players in the CTV ad market:

• Fewer CTV ad transactions for real-time bidding
• Fewer intermediaries in CTV transaction
• Lower platform fees captured by DSPs & SSPs
• Higher data fees, with DSPs and SSPs fighting to capture them
• Less “scrapable” user/publisher data on open exchanges
• Growth in importance of verified identity data
• Growth in “walled garden” share of CTV ad transactions

There’s a lot to unpack in this list above, which I will endeavor to do in future columns. In the meantime, the biggest takeaway is that much of the value in the CTV ad market -- certainly for ad optimization -- will shift from real-time decisioning to forward market planning and commitments.

Predicting the future will matter more in CTV ads than optimizing the present. Are you ready for that?