There is a paradox at work in the connected TV advertising market right now. According to a study from Advertiser Perceptions, advertisers overwhelmingly favor the established TV networks over streaming startups, preferring to stick to known partnerships. However, at the same time, reach is cited as a top priority. Something’s got to give if CTV is going to grow.
One place buyers need to look: the “premium middle,” between the highest-tier, big-name apps and networks, and the unknowns of the long-tail. These are quality niche sites and household names including This Old House, MLB.TV, Outside, Cox Media Group, Meredith Local Group and LocalNow.
CTV budgets have the potential to increase at a fast clip in the coming years, and at some point, once advertisers reach saturation on their currently limited partner list, spend could spill over from the large networks. The good news is that there is a lot of good out there. Major-league sports networks, top-tier gaming networks, cable networks and quality niche sites all have amazing CTV content that many advertisers are still holding at arm’s length.
Media buyers are wary for good reason — the opportunity for fraud is ripe (such as was found via the recent Pareto scheme, for example). Seasoned digital media buyers ruefully recall the blasted daisy-chain network schemes of the 2000s, while linear TV buyers are worried about getting out of their depth if they move beyond tried-and-true network partners.
However, the fraud isn’t on this ever-widening vein of quality content. The fraud is in how that content is accessed. In managing fraud, it can help to reference the concept of “cui bono” — who benefits most from introducing fraud into the ecosystem? Let's think about the evolution of display advertising to understand this better.
I liken what happened in the display market to the dynamics in the classic film Casino. When the mob bosses owned the casino, it was easy to skim off the top because the business was all under the table anyway. However, once the casino was bought by a legitimate corporation, skimming off the top was no longer tolerated given corporate compliance structures, governmental regulation and oversight, along with a focus on legitimate revenue management. The result was that the graft went away.
In the saga of display advertising, there was nowhere for the graft to hide once advertisers shined a light on the crooked intermediaries that were representing the inventory. Intermediaries with little accountability and a high propensity to maximize revenue through illicit schemes were driven out of town. Remaining in their place were premium content providers and publicly traded exchange platforms. Once everyone was held accountable, taking many of the unnecessary and high-risk ‘hops’ out of the digital market was easy.
The problem with display didn’t come out of thin air. It arose in two stages. First, networks rode in to aggregate smaller publisher sites to make it easier to buy at scale, which obscured where impressions were showing. Then, media buyers got greedy. They wanted to believe that they could get top-tier impressions for cheap at an illogically huge scale. There was a belief that they could throw money at the display networks and get back impressions that targeted audiences that were in fact larger than the actual population. So, for a long time they looked the other way, and then had to backtrack once they saw that they were paying for fraud.
In display, it took way too long for this issue to be solved. The same problems don’t have to replay in CTV. Right from the start, advertisers can use the lessons from display to weed out shady intermediaries, “hops” that skim off the top and fake ads or fake scale.
Advertisers can apply lessons learned to avoid the fraud that lurks in the dark corners of the CTV universe. It’s not particularly technical, nor does it require fancy math or algorithms. Yes, aggregators will help advertisers buy across sites more efficiently, but that doesn’t automatically mean that there will be fraud. Rather, advertisers should forge honest partnerships with proven companies, focus on clear and transparent contracts and avoid intermediaries that promise the fool’s gold of cheap reach or inventory that they don’t have direct access to.
The work needs to be done to support a direct path from a partner to the publisher, such as a ‘single hop’ that leaves no room for fraud. A regular audit can help ensure that only legitimate sites are bought, as can a contract that requires transparency across every impression. Advertisers would best be served by testing thoroughly to check that performance seems normal and isn’t grossly off-the-charts as compared to campaigns with the networks.
At the same time, adoption of the recently released CTV app-ads.txt spec will provide advertisers further insight into CTV supply paths, allowing them to avoid undesirable and unnecessary additional detours to premium inventory.
Advertisers could be missing out on excellent quality content and scale by sticking to only the big name, highest-tier publishers. They are also missing out on the potentially valuable target audiences and fair prices of the CTV premium middle. The good news is that the fraud they are worried about is not on the sites, it’s via shady middlemen. And it only emerges when advertisers lose sight of quality — right now, there’s a lot of quality waiting for them to discover.
Eric Bozinny is senior director of marketplace quality at Pubmatic, a supply-side platform (SSP) for agencies and advertisers.
