The Lure and Dangers of CTV for Ad Tech

Display and CTV have only one thing in common they both monetize publisher assets and it is monetization that provides the temptation for a strategic shift from display to CTV Is this a reasoned path to increase shareholder value or is it a mindless strategy driven by greedShakespeare had it right when he wrote quotHow quickly nature falls into revolt when gold becomes her objectquot Display and CTV have so little in common that a shift from one to the other is hardly a strategic evolution Instead it39s a shift from an open lowrisk business for many players to a highly protected highrisk business that has few players and even fewer winnersIn the display business publisher websites are accessed by users through browsers like Chrome Firefox Edge or Safari Ad banners and online videos of advertisers are displayed after advertisers quotwinquot the technologically automated bidding process for the site and its audience paying the highest auction price Over the years the online bidding process has evolved technologically permitting all potential advertisers to be quotinvited to the partyquot participating in an unbiased and instantaneous auction process The display business is an open one any advertiser can participate and bid the winner of the open auction displays its banner ads or videosCTV is entirely different With CTV the publisher is a content provider rather than a platform for ads The content has to be accepted by distributors like Roku Chromecast Samsung TV LG Ads Vizio Sony Apple TV and Amazon Fire for further distribution to streaming app channels like Pluto Tubi YouTube and others Some CTV content providers are so large that they have their own channels think Paramount ViacomCBS content and 20 million subscribers and Peacock NBC Universal content and 33 million subscribers However content owners who are thinking of getting in the CTV business are significantly smaller than these giantsCTV is like a set of Russian dolls content is housed on a platform that is then hosted on another platform and then on another and so on the platforms are nested within one another I could own and operate a channel called quotTaylor Farmer39s Camping Gear Reviewsquot I enjoy hiking and camping in the great outdoors but to get it on the air at Pluto for example I might have to have it hosted by Amazon Fire and rendered on a smart TVAll power resides with the distributors that control these platforms For example a 2020 carriage disagreement between Roku and Fox almost blacked out Super Bowl LIV on Roku devices Channels risk removal if they fail to adequately refresh their content and give viewers something new to watch One angry email from a distributor about the need for content refreshing will send content acquisition teams scurryingThis means that content owners do not control distribution and they cannot troubleshoot or optimize their performance because it is under the control of the platforms At best one can develop relationships with these platforms but there is actually little one can do to control the outcome The imbalance of power is overwhelmingThe highly different structures of display and CTV can be easily understood but the key players confound themselves and others by relying on acronyms that mask rather than reveal the essential differences of these businesses The clique of industry insiders who rely on using the language of FAST MVPD AVOD SVOD VAST SSAI DSP SSP CPM OTT and CTV are poised to make commonsense strategic errors particularly if they think that their mastery of acronyms and their successful participation in display gives them a legup in attacking and mastering CTVCTV is controlled by a very small handful of publishers selfdubbed the quotPublisher Oligarchsquot and they have so much scale and power that they completely throw off industry dynamics and pricing making it impossible for smaller channels to compete on a profitable basisAt the end of the day there is a high barrier to entry for profitable CTV operations Those many publishers who flourished in display and are tempted to take the plunge into CTV will be chastened by the difficulties they will face This is not to say that it is impossible strategic challenges beg to be overcome through creative thinking but first the odds must be calculated and they are very long indeedThis column was written by Taylor Farmer She is a strategic consultant specializing in ad tech and programmatic advertising Her career experience includes positions with 360i Criteo Index Exchange Nativo and ViacomCBSCartoon at top by Paul Noth The New Yorker The Cartoon Bank With permissionImage provided by Michael FarmerClick the social buttons above or below to share this content with your friends and colleaguesThe opinions and points of view expressed in this content are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated writers

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