The CTV Scramble

CTV plus SPO, what could be confusing?

It’s CTV Week! We talk to Kargo about CTV targeting and creative implementations. Our podcast covered SPO in CTV — why are there 114 paths to a single ad slot?! And Innovid’s new programmatic guaranteed play skips DSPs and SSPs, let’s see how it measures up against everyone else trying to reduce waste.

Vendor interview: Kargo

Kargo has been plugging away in the premium ad network market for longer than most of our readers have been alive, but with a push into CTV and unique creative implementations we wanted to catch up and hear their POV. In this interview with CEO Harry Kargman, we hear about creative formats, their commerce feed-based offering, and how they came up with the company’s name.

Watch the interview with Ari, free for a week before going behind the paywall.


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Podcast: Lara Koenig on CTV SPO

A couple of weeks ago the nice people at AdExchanger invited me to attend their excellent CTV Connect event (now that I’m a journalist I get comped!).

The most interesting presentation I saw was from Lara Koenig of MiQ who detailed all the insane ways that CTV inventory gets sold and how the price of the exact same ad might have 114 paths to buy and a price ranging between $8 and $22 CPM! Lara joined Eric and I on the pod this week to talk through what she’s seeing in CTV SPO.

Special bonus for Marketecture readers: Download Lara’s excellent presentation (PDF)

We also discuss the new privacy bill being considered in congress, Google-Hubspot, and ID5’s $20 million raise.

Listen to the pod now:

The CTV Scramble

TV Tug o war

This week I interviewed Innovid CEO Zvika Netter at the New York Stock Exchange. Innovid announced Harmony Direct, an initiative to let their customers execute programmatic guaranteed (“PG”) deals without using a DSP or SSP. This announcement comes on the heels of many similar announcements aimed at reducing the perceived inefficiency in the video supply chain. Let’s get to the bottom of what is happening.

This thing (PG) is not like the others

PG deals are when the seller and buyer agree on the price, volume, and media contents of a transaction, then execute using an SSP like Google AdX, and a DSP, like The Trade Desk, over the RTB protocol.

You might ask yourself why buyers and sellers want PG deals instead of old-fashioned direct IO deals, and that would be a pretty good question. The rationale for PG is that it allows both buyers and sellers to consolidate their analytics, budget and frequency management in their preferred platforms and it requires less coordination (theoretically).

The weird thing about PG is the DSP doesn’t really do anything useful. The DSP must bid and win 100% of the auctions being sent their way and cannot utilize targeting, frequency management, or anything else. This inventory is essentially “non-biddable”.

Innovid estimates that 70% of all CTV buys are “non-biddable” and that the proportion going to PG deals is increasing (see illustration below). Mediaocean gave me a very similar estimate, that 2/3 of CTV buys were non-biddable.

Source: Innovid. FY ‘23

Getting the most for your money

Personally, I find the phrase “ad tech tax” hugely cringe. A total “L” as the kids say. But I will leave it to friend-of-the-pod Jay Friedman to give us the quote:

Only $.12 on the dollar gets to banana growers. I think that’s just sad. But it doesn’t mean I want to go to the jungle to get my bananas.

Jay Friedman

Vendors are there for a reason, and when they add value they should be paid. That’s why it’s not a tax. And this brings us back to PG, and why it is a battleground for ad tech vendors looking to squeeze out parts of the supply chain that aren’t adding value. Because, frankly there is too much complexity and too many vendors for something that is supposed to be easier.

Also, there’s so much money. It does not escape buyer attention that the Media CPMs on CTV are 10x higher than banners, resulting in fees that can be as well. That’s a lot of bananas.

Editorial note: If you don’t believe there’s waste in CTV, you haven’t listened to this week’s podcast or downloaded Lara’s presentation showing 114 paths to the same CTV inventory.

🍌 Let’s go banana picking!

There’s been a lot of news around CTV supply paths. Let’s go through your options as a buyer and seller in your hunt for cheaper bananas.

Option 1: SSPs offering buyer tools

Magnite lets buyers skip DSPs with ClearLine. This is a way to buy CTV inventory without a DSP and is aimed specifically at the PG and direct IO opportunity. Presumably the take rate is paid entirely by the seller — I’ve heard the rate is variable and undisclosed, but if anyone can confirm or deny, please reach out.

Pubmatic rolled out their Activate solution in 2023. Seems more or less identical to ClearLine, though they emphasize in their announcement the ability to bring first party data.

Option 2: DSPs skipping SSPs

The Trade Desk announced OpenPath, it’s don’t-call-it-an-SSP service over two years ago. They were reported to support CTV this February, with partners Vizio and Cox. Presumably this integration is primarily for biddable scenarios, since it would be challenging for a DSP to do the ad server integrations necessary for PG delivery.

Option 3: Publishers skipping SSPs

Disney recently launched DRAX Direct with partners Trade Desk and DV360, giving those DSPs direct access to their supply, though it isn’t clear if this includes PG or just biddable. Interestingly, this integration includes privacy-friendly identity matching using UID2 and PAIR, respectively. Disney went to pains to indicate these direct relationships don’t preclude SSPs, but no one believes them.

Option 4: Buy-side platforms skipping DSPs

Innovid and Mediaocean are both offering ways for buyers to execute PG deals without DSPs, but in different ways.

Innovid’s Harmony Direct takes advantage of their existing ad server relationships and essentially uses APIs to push tags between buyers and sellers. So a PG deal can skip both DSPs and SSPs. Free bananas for all the monkeys!

Mediaocean, on the other hand, announced an exclusive partnership with Magnite whereby line items from the Prisma planning solution can be booked directly into ClearLine. This, they say, reduces workflow, reconciliation, and billing complexity. I am going to assume that FlashTalking tags are also a part of this for common customers.

What’s next?

The trend seem to be towards two divergant outcomes:

  1. SSPs getting squeezed out of the biddable paths, and having their take rates shrink;

  2. DSPs getting squeezed our of the non-biddable paths, and having their take rates shrink.

There’s a lot of keep track of here and a lot of moving parts. This can all change in an instant. Let me know what you think.

Editorial note: Innovid is a sponsor of our podcast, but did not have any influence on this editorial coverage.

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