TV's changing sales channel

There’s been a lot of news about CTV buying platforms. Let’s give some context.

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TV's changing sales channel

Whenever anyone asks what areas of digital advertising get me excited, my first answer is always CTV buying tools. This answer probably makes my friends at Vibe.co happy since I sit on their board — it would be bad if that wasn’t my answer!

Vibe and its direct competitors are benefiting from a change in the structure of the market for television advertising that is similar to what took place in the transition from print to digital in the 2000s.

Start with the consumers

It isn’t news to anyone reading this newsletter that consumers have changed their television viewing habits radically over the past ten years. Cutting-the-cord and unbundling cable is an ongoing and radical change to the television business. But often we spend time thinking exclusively about the impact of streaming on TV production and distribution, not as much on ad sales.

Television sales channels democratizing

In the old model, the minimum entry point for national TV buying was in the hundreds of thousands of dollars, while local spot cable might set you back twenty-five grand. CTV blows these assumptions up and enables buying at much smaller dollar amounts. Just as programmatic allowed for “spot” buying of banners, programmatic CTV has virtually no minimum spend level.

Being able to buy very small budgets sounds great, but the systems and services of the traditional TV sellers also needs to be replicated. This is where there are different approaches in the market.

First, existing local TV sellers in the market are adapting, with the help of technology vendors. Companies like Comcast’s Effectv and Tegna’s Premion are trying to not get disrupted. They have a lot going for them:

• They can bundle linear and digital;

• They have existing local advertiser relationships;

• They are used to servicing the local and smaller agencies.

While Tegna recently purchased Octillion to accelerate this effort, other vendors that support media company trading desks include Beeswax, MadHive, and The Trade Desk.

On the other end of the spectrum are the CTV-first start-ups. In my humble opinion, right now this is currently a three-horse race between MNTN, TVScientific, and Vibe.co. But there are others! This week’s Marketecture Vendor interview was with another one, Streamr.ai.

The pieces these companies are trying to assemble to create a complete solution include supply, a simplified UI, creative solutions, and attribution.

CTV supply can be difficult, since the sellers often maintain strict rules about access to help maintain their sales channel strategies. As a result, it takes significant partnership work to get access to the good stuff.

CTV supply also requires a lot of taxonomy and organizational work. If you asked some rando on the street how they think CTV buying would work, they would probably say “well, I choose a program like ‘CSI Miami’ then set a budget.” Dumb rando! The lack of program info and confusing duplication of auctions across multiple sellers needs to be radically dumbed down for these new TV buyers.

Many new TV buyers don’t have appropriate creatives. One option, is to acqui-hire Ryan Reynolds. Other options might involve AI (like Vibe announced, or Streamr is offering). There’s a lot going on in this niche, and it will be fun to watch.

A lot of effort has gone into making attribution work in TV and CTV environments. These efforts are great for moving the traditional TV buyer into the programmatic mindset, and make their buys more accountable. But a lot of this advanced TV measurement is quite costly and time-delayed. The new buyers in TV expect performance reports on the same basis they are used to from Meta and others. That means device graphs, IP addresses, and hashed IDs.

While mainstream DSPs like The Trade Desk and Beeswax are focusing in CTV in general, there’s too much work needed to create the ease of use and simplicity required for smaller buyers with smaller campaigns, so the specialists are jumping in.

The big guys

I’ve remarked before how curious it is that Meta doesn’t have a TV strategy. But it doesn’t.

Google just announced that YouTube is on a $50 billion revenue run-rate, so don’t cry too hard for them. But it is kind of remarkable how little they do outside of YT in the TV arena. I understand identity is the key issue — many other vendors use third-party graphs or IP addresses for identity, but Google is not willing to.

Roku just announced their sef-serve offering, with a focus on performance advertising. One to watch, as they have so much data within their “unwalled” garden.

Amazon is really the danger here. The have FireTV inventory, a DSP, and a buying interface for thousands of small advertisers.

In any case, there are two reasons to be really excited about these developments. First, it is bringing new dollars to the market, which I think we can all be happy about. Second, this is evolving outside of the big tech giants. Whether it can continue as such is an open question.

Reading list

• Reddit, Snap reported solid earnings (link)

• Criteo - total revenue up 9% YOY, retail media up 23% YOY (link)

• IAS in play (link)

• Nicolle Pangis new head of ads for Netflix (link)

• Meta strikes multi-year AI deal with Reuters (link)

• Vibe “Studio” launch video (link)

• Publicis lets go of dozens over ‘egregious’ RTO violations (link)