51% of CTV Ad Purchases Are Direct – What Is the Best Way to Buy Inventory?

51% of CTV Ad Purchases Are Direct – What Is the Best Way to Buy Inventory?

The Connected TV market is expected to grow from $8.20 billion in 2023 to $15.24 billion by 2028, with a growth rate of 13.20% during the forecast period. This trend is not surprising as CTV allows advertisers to create and precisely broadcast ads only to users who could be potentially interested in the product or service, which is beneficial for ad budgets. The more specific and personalized the ad, the more it resonates with the audience's needs, increasing the likelihood of effectiveness.

However, the growing market for CTV solutions presents advertisers with a dilemma: What is the best way to buy CTV inventory? Each method of purchasing CTV ads offers its own set of benefits and challenges. Let’s review the most popular ones to find out.

Direct Buying

Did you know that one-third of marketers are exploring OTT platforms such as Disney+ or Netflix to transform their advertising game? Notably, 51% of EU advertisers purchase inventory directly from publishers, according to the CTV, Targeting, and Sustainability ExchangeWire Report for 2023–2024.

Main Benefits: When advertisers buy CTV inventory directly from publishers, it provides greater control over where and when ads are shown, ensuring brand safety and premium placement. Direct relationships with publishers can also lead to better rates and the opportunity for customized ad solutions and rates for ad serving.

Programmatic RTB

CTV ads served via programmatic (aka programmatic TV) are automated ad placements on connected TV devices with deeper and more detailed targeting based on the viewer's digital characteristics. Despite various methods available, open exchange and programmatic real-time bidding (RTB) currently stand out as the best approach for purchasing CTV across Europe, with 54% of surveyed respondents opting for this method. In general, programmatic currently accounts for around 70-88% of all media purchases worldwide.

Main Benefits: This method of media buying is easy since it is implemented via demand-side platforms, ad networks, or ad exchanges. Plus, it allows real-time management of ad placements unavailable on linear TV or with manual placements.

Programmatic direct 

According to the abovementioned report, 66% of questioned buyers prefer organizing direct deals via programmatic platforms. This latest research indicates that agencies tend to favor programmatic methods slightly more when sourcing their CTV inventory. In contrast, brand professionals are more than twice as likely to purchase directly from platforms compared to agencies, with 59% of brand professionals opting for direct buys versus only 24% of agency counterparts.

Main Benefits: Programmatic direct offers media buyers the combined benefits of programmatic direct and automated programmatic purchasing. While the deals are performed on the programmatic platforms, with real-time analysis, targeting, and campaign management, advertisers are not taking part in RTB auctions but working with publishers directly, thanks to the deal ID. This enables campaign relevancy while advertisers have a clearer understanding of where the ads will be placed.

Programmatic PMP

Over 54% of surveyed respondents also choose private marketplace auctions (PMP). This type of programmatic purchasing is also based on real-time bidding. However, PMP buying involves private auctions where premium inventory is offered only to those advertisers who were invited to the auction. In other words, these auctions are invitation-only, meaning only certain advertisers have access to bid on the inventory.

Main Benefits: PMP deals often provide access to higher-quality inventory that may not be available on open exchanges. This can include prime-time slots, popular shows, or content from reputable publishers. Additionally, this type of auction delivers more predictable media-buying outcomes. With this, advertisers can benefit from even more precise targeting options and privacy-friendly targeting (in case the publisher opens access to first-party data for targeting).

Hybrid approach

Advertisers are massively adopting hybrid approaches, combining the precision of programmatic buying with the control of direct buying and PMP. This strategy allows them to reap the benefits of all methods, optimizing their campaigns for maximum effectiveness. Others are experimenting with methods to find out which mechanisms of media-buying suit them best, as a lot may depend on the specifics of particular businesses and the products they offer to their audiences.

Choosing your method

Ultimately, the best way to buy CTV inventory depends on an advertiser's specific goals, resources, and target audience. Smaller businesses or those new to CTV advertising may benefit from starting with programmatic buys to test the waters and refine their targeting strategies. Larger brands with established relationships with publishers might find more value in direct buys and PMP, ensuring their ads appear in premium contexts, which is also available on programmatic platforms. The hybrid approach, meanwhile, will enable media buyers to test different approaches and determine the right mechanisms that suit their budget, media quality objectives, and targeting requirements.

And what is the best way for you to buy CTV inventory? Share your opinion in the comments!

#CTV #Advertising #Innovation #FutureOfAdvertising #AdTech