OverviewDrastic changes in consumers’ content consumption, coupled with the proliferation of CTV service options, are transforming CTV into an extremely important part of a brand’s media mix. By 2020, eMarketer estimates there will be about 196 million CTV users, most of which fall into marketers’ most coveted audience - young and affluent.

Content creators and owners are seeking new solutions that efficiently and effectively monetize their CTV inventory. Traditionally, the owners of CTV content have guarded this inventory due to its premium nature, high value, and technical complexities. As such, CTV inventory is usually sold via direct sales channels with a very small portion of this inventory ending up transacted through programmatic means. In fact, roughly 86% of CTV inventory is purchased through direct means1. However, buy-side preferences are causing that paradigm to shift rapidly.

Driven by constant changes to buy-side transaction needs and methods, content creators and owners need partners that enable them to transact the way buyers want, while providing mechanisms to meet the strict requirements of a CTV buy, all done while capturing the most value for the inventory.

CTV via Programmatic Guaranteed

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CTV Reaches the Right AudienceAccording to the IAB, the audience for Ad Supported Video (ASV) via CTV is highly-coveted. They are younger and affluent. 44% of CTV majority viewers are between 18 - 34 years old (compared to just 30% of the US population and 10% of traditional-TV only viewers) and 34% of CTV majority viewers have a household income of $75K+ per year (compared to just 28% of the general US population and 21% of traditional-TV only viewers)1

1 www.iab.com/wp-content/uploads/2018/12/IAB_Video_Landscape_Report_2018-12.pdf

At Rubicon Project, we feel that one of the best solutions for both the buy and sell sides right now is Programmatic Guaranteed for CTV.

What is Programmatic Guaranteed? Unlike the Open Exchange where price and delivery is dynamic based on supply and demand, Programmatic Guaranteed (PG) provides predictability and security across budgets and inventory. Since deals are pre-negotiated between the buyer and seller, all uncertainty in the transaction process is removed. This means when executing a PG deal, there are fixed values for impressions, price, and delivery.

For content creators and owners, PG is a boon because it allows them to safeguard the value of their inventory while meeting the needs of buyers. Since price and volume is agreed upon beforehand, there is no guesswork or estimations needed. It becomes easier to predict demand and forecast revenue.

Additionally, PG enables content creators and owners to work with higher quality, premium brands, as PG ensures a level of quality and safety that cannot be guaranteed via other types of programmatic transaction types.

All of this is especially important when it comes to a channel like CTV where the CPMs are much higher, the business requirements are much more stringent, and delivery is much harder to guarantee.

CTV via Programmatic Guaranteed

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CTV via Programmatic Guaranteed

CTV Executional Needs In the Connected TV space, just like with the rest of AdTech, there are a lot of acronyms to sift through - Connected TV (CTV). Over-the-Top (OTT). Advanced TV (ATV). Depending on who you talk to, you can get a different definition of each technology. At Rubicon Project, to simplify things, we follow the IAB’s standard definition of each technology and instead focus our energy on identifying the challenges and opportunities that exist when executing campaigns against long-form, episodic content with multiple ad breaks and slots.

While complicated from a technology perspective, from an advertising perspective CTV behaves more like traditional, Linear TV advertising than other forms of digital advertising.

Similar to Linear TV, CTV advertising has to consider, and account for, brand-driven business rules like:

— Competitive/Industry Separation

— Pod Positioning

— Creative Quality & Length

In addition to buy-side business rules, content creators and owners need to account for their own business rules:

— Yield Optimization / Filling Pod Inventory

— Pod Position and Sequencing

— Advertiser / Category Exclusivities

— User Experience

Unlike Linear TV, CTV can take advantage of some digital-first technologies including:

— Data targeting at a request level (demographics, psychographics, location)

— Real-Time Ad Performance Reports

— CPM / Viewable Impression Metric

For example, a buyer representing an auto manufacturer wants to run a :30s ad in the first pod first position with pod exclusivity. This means the advertiser wants their :30s ad to be the first ad slotted to appear in the first ad pod, with no other auto manufacturers in that same pod.

Unfortunately for content creators and owners, there are endless permutations of these rules that they need to account for. While considering one advertiser, like the above, is simple enough, in reality CTV execution is immensely complex. Depending on the show’s length, there can be three to four ad pods, with each pod having three to five ad slots. Trying to fulfill on CTV buys can become arduous for the content creators and owners, especially if they are trying to fill these ad slots programmatically.

It is up to the content creators and owners and their technology partner(s) to translate these business rules into executional guidelines in order to capture the highest value for their inventory. This is where Programmatic Guaranteed for CTV shines.

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Connected TV Shines In Private MarketplacesAccording to the IAB, over 90% of CTV that is purchased programmatically, is purchased via a Private Marketplace, like Programmatic Guaranteed2

2 www.iab.com/wp-content/uploads/2018/12/IAB_Video_Landscape_Report_2018-12.pdf

CTV via Programmatic Guaranteed

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Programmatic Guaranteed for CTV Executing a Programmatic Guaranteed (PG) Deal for CTV can be fairly seamless. All the buyer and seller have to do is negotiate the rates, impressions, and delivery based on the business rules. Once those rules are agreed upon, the rules are entered into the PG Deal line item in their ad server, and everything is set to go. Since all the components of the PG Deal are pre-negotiated, the buyers know exactly what to expect from a cost and impression perspective and the content creators and owners know exactly what they need to execute one.

With PG for CTV, content creators and owners are able to:

— Efficiently allocate inventory and achieve 100% fill

— More accurately forecast revenue

— Create and strengthen relationships with premium brands and buyers

— Capture more value for their premium video inventory

At Rubicon Project, our goal is to connect buyers and sellers to create an efficient marketplace for digital advertising. This goal extends to CTV, where we’re dedicated to connecting top-tier content creators and owners to premium buyers in order to foster PG Deals for CTV and deliver better outcomes.