Exclusive: 6 Ad Companies Accuse Pluto TV of Exploiting Programmatic Auctions

Six ad firms—including four that buy online ads and two whose technology helps sell ads—have told ADWEEK that they are limiting their clients’ exposure to streaming ads from Pluto TV, whose parent company Paramount has agreed to merge with media company Skydance.

They are worried that Pluto TV is taking advantage of programmatic auctions to sell more ads at higher prices. 

At the center of these concerns is a practice called bid duplication, where publishers and their tech partners send out multiple opportunities to buy a single ad.

Bid duplication tricks programmatic platforms into thinking a publisher has more scale than it really does. These ad-buying platforms use automation to buy ads from the publishers with the biggest audiences. 

While not illegal, bid duplication is a controversial practice. It can drive up ad prices because it causes more buyers to bid on a single ad, essentially increasing demand.

Flooded with bids

A source within Pluto TV said there are multiple reasons why a live channel selling programmatically would send more than one bid request for each impression. Publishers like Pluto need to be able to choose from a wide variety of bids to ensure a better audience experience, this person said. For instance, Pluto needs to make sure that it can fill ad breaks, or people don’t see the same ad too frequently, or competing advertisers aren’t in the same pod.

Andrew Casale, CEO of ad platform Index Exchange, agreed that these features would require a larger number of programmatic bid requests.

But other sources told ADWEEK they were concerned about the unusually high volume of bid requests Pluto and its tech partners send compared to other streamers, including FAST channels (free, ad-supported TV) that were similar to Pluto.

This source noted that across deal IDs one day in June, Pluto and its tech partners sent out 9.4 billion bid requests in a single day, compared to 133 million for Tubi, 750 million for the Roku channel, and 1.3 billion each for Samsung and Vizio WatchFree+. A deal ID is a way ad sellers can automate buys with specific ad buyers.

Other ad buyers have seen similar results.

A second media buying source said that for 30 days from mid-June to mid-July, Pluto TV via sell-side tech partner Magnite sent out 101.8 billion bid requests in a deal. Over that same time period, AMC Networks sent just 7.8 billion bid requests through Magnite, and Warner Bros. Discovery sent less than 6 billion bid requests through Magnite.

A May report from programmatic consultancy Jounce Media said Pluto TV accounts for 22% of all CTV bid requests, far more than any other streaming service. 

This volume is notable because Pluto TV has less watch time than other streamers. In the U.S. in June, Pluto accounted for 0.8% of watch streaming and TV time, according to the latest Nielsen figures. Warner Bros. Discovery-owned Max made up 1.4% of watch time, Roku Channel accounted for 1.5% of watch time, and Tubi accounted for 2% of watch time.

The Pluto TV source said Nielsen measures audiences, not ad inventory, and claimed Pluto has more inventory than other streamers because it has both live and video-on-demand channels. 

To be sure, Pluto TV isn’t the only streaming service that works with tech partners to send out multiple bids, according to the Jounce report and ADWEEK’s sources. The Jounce report noted that Pluto TV used to account for more than half of real-time bidding auctions for connected TV supply in early 2022, but that has decreased over the last year as other streamers are doing bid duplication.

Tricking the algorithms

Ad-buying platforms can have trouble distinguishing the difference between a publisher with lots of bid requests and lots of actual viewers, buyers said. Ad buyers have noticed they inadvertently spend more on Pluto than they want because they use automation to purchase ads based on audience size.

“Pluto will eat your money if you don’t manage it,” said a buyer source.

Typically, no single publisher should make up more than 10% to 15% of a media plan, another ad buyer told ADWEEK.

Yet, as this person started purchasing more CTV programmatically in 2022, Pluto soon was winning 50% of many clients’ budgets, despite only representing 5% to 10% of the unique audiences clients were reaching. 

Another ad buyer said that earlier this year, Pluto TV was taking up more than half of its clients’ budgets. 

Buyers also have found they are paying more for Pluto impressions compared to other streaming services.

Streamers set a floor price for their online auctions, or the lowest bid they’re willing to take. For example, on Pluto, the average winning bid for one client was usually 55% above the floor, the buyer source said. By comparison, the winning bid for Tubi ads is usually 11% above the floor, and the winning bids for Sling TV ads are usually 29% above the floor.

Another ad buyer also noticed that for most streamers, the winning bid is typically between 0% and 10% above the floor, but for Pluto TV it’s 25%, based on several weeks of data collected during the spring.

Ad buyers take action to limit exposure to Pluto TV

Sources who confronted Pluto TV about this issue had mixed results.

One media buyer said they stopped buying Pluto in late 2022 because the streaming service wouldn’t explain why the bid volumes and prices were so high.

After a year of abstaining from buying Pluto TV, this person’s firm renegotiated to be able to tie the bid requests in the auction to viewers. Pluto is the only streamer this firm has negotiated with due to bid duplication concerns, this person said.

“They were really guarded about their data,” the person said. “They told me no one else asked for this.” That buyer eventually won more transparency and pricing concessions.

Other sources have had less luck confronting Pluto TV, including one adtech firm that first noticed a problem with duplicated bid requests around 2020.

The source observed instances of Pluto TV and its tech partners sending more than 300 duplicates of a single bid request. This level of duplication was not seen with any other streamer. “We had a conversation where they outright told us you shouldn’t be telling us how to operate our business,” an adtech source said.

This source’s company has taken steps to limit clients’ exposure to Pluto TV inventory.

Other sources address the issue internally

A third adtech company told ADWEEK it has built a tool to de-duplicate the bid requests coming from sellers, and started with Pluto TV because it was “the 900-pound gorilla in the room.”

After using the tool, the adtech firm found that for some clients, 50% of Pluto’s bid requests disappeared. 

Three buyers told ADWEEK they are reallocating money away from Pluto TV. One ad buyer is moving tens of millions of dollars away from Pluto by building a tech solution that limits clients’ exposure. Another buyer source said his firm this year moved hundreds of thousands of dollars away from Pluto. 

“If I’m trying to get the best deal possible for our clients, it just doesn’t make sense to let Pluto run away with the budgets,” the buyer said. 

As programmatic advertising in streaming TV accelerates, ad buyers are starting to encounter an ecosystem similar to the online ad market, which is frustratingly non-transparent. 

But not everyone believes the responsibility is on ad sellers alone to clean up the ecosystem.

“I don’t think it’s Pluto’s job to fix this for us or any of the advertisers,” one brand advertiser said.