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Marketers should know that relying solely on programmatic buys for Connected TV (CTV) severely limits reach. This method only taps into a small fraction of the available ad inventory, missing out on premium content like major live sports that must be purchased more directly.
Marketers can test Connected TV (CTV) with a minimal budget by using the YouTube ads platform. The strategy involves uploading an existing audience list (e.g., email subscribers), setting the campaign to target *only* TV devices, and then running existing video creative to gauge performance in a television environment.
Unlike the fragmented digital web, TV advertising is dominated by about 10 publishers. Tatari argues that direct, one-to-one tech integrations with these giants are superior to programmatic exchanges, as they eliminate intermediary fees, reduce fraud, and ensure brand safety in premium content.
Historically, TV advertising required massive budgets and long commitments. Self-serve connected TV (CTV) platforms now offer low minimums, allowing DTC brands to test and iterate creative with the same agility and small budgets used for search and social channels.
Brands can purchase high-visibility, premium TV spots like college football at a discount by tapping into "fire sales" of remnant inventory. This requires an agile budget and quick communication with your media partner to capitalize on these last-minute deals.
While useful for programmatic CTV, Demand-Side Platforms (DSPs) were not designed for the entire TV ecosystem. They can only access about 20% of total available TV inventory, excluding the other 80% which includes crucial linear TV opportunities like live sports and premium broadcasts.
The price disparity isn't about viewership. Legacy TV ad buys are often part of complex, negotiated packages that include talent access and integrations. This "engagement model" is different from YouTube's biddable, auction-based system, keeping TV prices high despite weaker analytics.
Programmatic ad buying, standard in digital, doesn't work well for TV. The market is too concentrated, with ~90% of inventory controlled by just 10 major publishers. This makes direct integrations and relationships far more effective and efficient than automated, auction-based programmatic systems.
Focusing exclusively on programmatic buying for CTV is a critical error, as it represents only 7% of all ad-supported TV inventory. This siloed approach misses the vast scale of linear and direct-publisher streaming, while often incurring higher CPMs and limiting a campaign's total reach and efficiency.
Traditional linear TV still commands about half of all viewership and ad inventory. Crucially, major live cultural moments like the NBA playoffs are sold as linear buys, even when viewed on streaming services like Hulu Live. A streaming-only strategy forfeits this premium inventory.
The next major shift in ad tech is performance-based CTV. This merges the attention of linear TV with the accountability of digital media, allowing advertisers to tie ad spend directly to outcomes like sales—a revolutionary change from traditional television's limitations.