The Latest Programmatic Trends on OTT

Audiences are shifting to OTT—and advertisers are following.

Analysts at eMarketer predict a 50% jump in OTT ad spending this year. This comes at a time when third-party identifiers are being phased out and first-party data is gold.

With the right ad tech partners, brands can layer their first-party data with consumer streaming data to make sophisticated buyer segments.

But this buying strategy is still relatively young and programmatic OTT buying is often a new process for brands. We dug into the most recent data to identify trends within the space and notable programmatic buyers.

OTT Gives Advertisers Data-Driven TV Content, But Programmatic Supply is Limited

Advertisers have wanted to leverage the scale of TV and the precision of digital for years. And now ad supported video on demand (AVOD), with the partnerships of ad tech providers, can deliver this combination.

The challenge is that the supply for programmatic buying on CTV is small. Most inventory is bought up by upfront deals and across private marketplaces. This leaves only a sliver of the supply for DSP-traded inventory.

“The majority of the premium inventory is ending up in walled gardens, either controlled by the TV networks or Roku and Hulu,” said Jamie Power, chief data officer of Cadent, to AdExchanger.

Early adopters owned by major ad tech companies (e.g. Comcast, Magnite, and The Trade Desk) hold on to the inventory not owned by Hulu, Roku, Amazon and Google. Other companies compete for the leftovers—which makes up about $9.5 billion of advertising spend.

Not all of the inventory has been consolidated, but this relatively small supply cuts into a DSP’s ability to serve ads and deliver results for their partners.

The process of shifting linear buyers to programmatic OTT isn’t simple—and the entire ecosystem is evolving. Questions remain over things like the ad tax, pricing and whether IP addresses count as PII, but it’s certain that consumers are streaming and brands are wanting more advanced and efficient capabilities to target them.

MediaRadar Insights

How many brands are already buying OTT ads programmatically?

In April there were 1.6k brands buying OTT advertising at large. Of those brands, 63% (1k) were buying ads programmatically.

Though 63% of advertisers were buying programmatic advertising, their spend accounted for 12% ($9mm) of all OTT ads ($74mm).

Programmatic represents only a small portion of all OTT spending. Similar to other programmatic advertising, brands are buying small ad spots directed at segmented audiences.

Brands who only bought programmatic OTT advertising in the month of April include: