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How are Brands Using Programmatic on OTT?

How Are Brands Using Programmatic Advertising on OTT?

Programmatic advertising is powerful, and when combined with over-the-top (OTT) media, the format has the potential to do wonders for brands.

Ad tech companies are expanding their programmatic capabilities on OTT. And while new deals take place, brands are starting to experiment with this way of advertising. 

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Latest Developments in Programmatic Advertising on OTT

Starting Q2 2021, NBCUniversal will increase its number of reachable households with addressable advertising. Addressable advertising allows companies to serve different, targeted ads to different households watching the same shows. Ads can be based on geography, purchasing history, and other data points.

Partnering with Charter Communications—the number two cable provider in the U.S.—NBCUniversal will be able to serve addressable ads to 45 million households.  

Shifting gears, Magnite is buying SpotX to broaden its capabilities in the programmatic ad space on streaming services. Once the deal is complete (2nd quarter 2021), the company says “it will be the largest independent CTV and video ad platform in the programmatic space.”

Connected TV (CTV) advertising is currently not Magnite’s biggest source of revenue, but it’s the “crown jewel” of opportunity. According to Magnite, CTV revenue grew 50% in Q3 2020, and the number of CTV advertisers using targeting features grew two and a half times between Q3 2019 and the same time period 2020. 

Magnite also recently released the beta of Unified Decisioning, a system that allows buyers to manage direct and programmatic purchases simultaneously within OTT.

Moving on to other players in streaming programmatic, Taboola renewed its partnership with Sinclair Broadcast Group. According to Taboola, “the partnership will result in Sinclair using Taboola’s discovery platform and suite of products across their television station sites including its ABC, CBS, FOX and NBC affiliates, as well as its mobile platforms, to optimize user engagement, increase audience loyalty and drive revenue.”

For advertisers who are concerned about ad fraud in the programmatic space, BidMind by Fiksu, a Connected TV/OTT advertising platform, is alleviating those issues. The company is now using Pixalate to thwart invalid traffic in OTT advertising.

“Cooperation with Pixalate will help us take media buying to the next level making advertisers sure that every dollar of the ad campaign will pay off, and that fraudulent traffic will be reduced,” explained Anna Kuzmenko, COO at Fiksu.

MediaRadar Insights

Though streaming has been around for more than a decade, the technology used to serve ads is growing more sophisticated each year. And with each new step in ad tech’s maturing process, brands are spending more, or at least willing to try something new.

In January and February, we saw that spend in programmatic advertising on OTT platforms increased 5% from $85mm to $89mm YoY.

Though the increase in spend is modest, the number of brands using this form of advertising grew dramatically. The number of buying brands increased about 60% in the span of a year (3.5k in 2020 vs 5.6k in 2021). This suggests that brands are willing to dip their toes in, but aren’t ready to heavily invest in programmatic across OTT.  

The top 10 spending brands YoY made up nearly the same percentage of spend (14% in 2020 and 12% in 2021), leaving over 5,000 brands spending about $80mm programmatically in OTT.

programmatic spend in OTT by category 2020 vs 2021

The top five spending categories in 2021 make up 66% of programmatic ad spend. They are:

  • Finance
  • Tech
  • Media
  • Retail
  • Professional services.

These categories include brands such, as Fidelity Trading, Microsoft Teams, Apple News+, Subway, and Weight Watchers.

*Important note: This dataset excludes programmatic ad spend on Hulu

subway ad athlete flipping large tire
apple news plus ad
microsoft teams learn more ad
get fidelitys dashboard ad

For more creative examples and spend details, check out an advertiser’s profile using a custom demo. 

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