As brands sit down with publishers to discuss connected television deals during this upfront season, they are asking for more efficient programmatic supply paths with fewer tech partners between buyers and sellers, six media buying sources told ADWEEK.
“The publishers that will get the most money from us are the ones that eliminate the most waste and the most unnecessary fees,” said Jay Friedman, CEO of digital marketing agency Goodway Group.
Supply path optimization has grown more trendy in open web programmatic in recent years as buyers look to eliminate wasted ad dollars, understand where their ads appear and target more premium inventory.
But SPO had previously been less relevant to CTV. Even though streaming TV is rendered digitally, it has mostly been purchased via direct insertion order and not programmatically. In May 2023, PubMatic estimated that 60% of CTV transactions would be bought manually over the year.
Supply has grown more fragmented
As streamers make more inventory available programmatically and more adtech firms want access to lucrative CTV budgets, there is a growing risk of media spending getting eaten up by tech taxes and flowing to suboptimal inventory.
The pathways between buyers and sellers in CTV are already complex: There can be up to 114 different supply paths to the same TV application, according to research from programmatic media buying firm MiQ, presented at AdExchanger’s CTV Connect event in March. What’s more concerning is that prices of this same inventory from different buying pathways can vary by up to 250%.
But complicated sales rights deals in an already fragmented CTV market mean several media companies might sell the same inventory.
While the company didn’t have historical statistics, MiQ began noticing the problem of fragmented supply paths at the end of 2023, after more CTV publishers began testing more tech partners in August of last year, said global head of product Lara Koenig.
Agency sources still prefer to buy CTV programmatically because it generally allows for more organization, reach and technical capabilities like frequency capping. But it needs to be as efficient as an automated, technical process would promise.
“We want to buy our CTV programmatically, but the challenges in the current programmatic landscape are often too substantial,” Friedman said.