OTT Programmatic Advertising — Understanding the Democratization of TV

Mar 2, 2022

Jason Fairchild

Co-founder and CEO, tvScientific

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Learn how OTT programmatic advertising has made TV ads both accessible and rewarding for brands of all sizes.

High-value TV inventory is available to smaller advertisers thanks to OTT’s accessible media buying and improved cost efficiency

Television advertising is at an inflection point — while linear TV is a niche reserved for a select few, OTT advertising is a promising channel for brands of all sizes. With the advent of OTT programmatic advertising, smaller companies have gained access to TV inventory that had priced them out in the past. Let’s look at how programmatic OTT ads are democratizing media buying, improving cost efficiency, and so much more.

Our comprehensive guide, What Is OTT Advertising? Why Over-The-Top Is the Channel to Watch, can help take your strategy to the next level.

What Is OTT Programmatic Advertising?

OTT programmatic advertising is when advertisers use software to purchase digital ad space that is targeted to a specific segment of streaming content viewers. Said another way, OTT programmatic is the automated process of buying and selling ad space within streaming services and connected TV platforms. Breaking the concept down to its composite parts can help develop a deeper understanding:

OTT Advertising

OTT advertising is when companies run ads embedded within the content that is available through connected TV (CTV) technology. While CTV advertising is a type of OTT ad delivered specifically through TV glass, the general category of programmatic OTT ads can be delivered anywhere consumers stream content, including smart TVs, mobile devices, tablets, and computers.

Programmatic Advertising

Programmatic advertising (on any channel) is the practice of buying and selling ad inventory through automated bidding. Artificial intelligence and machine learning algorithms use a huge range of data inputs (including demographic and behavior data) to determine relevance and match specific ads with available inventory.

Incorporating the best of both worlds, OTT programmatic advertising enables faster transactions between advertisers and publishers, performance metrics and attributable results, and increased impressions, reach, and return on ad spend (ROAS).

OTT Is On The Rise

The more consumers turn away from cable television toward streaming services, the more important programmatic OTT advertising will become. From 2017 to 2021, the number of US households with linear TV subscriptions (like cable or satellite) shrank from 94.3 million to 74 million. During the same five-year period, the US cord-cutting audience grew from 32 million to 54.4 million. Cord cutters are expected to outpace linear TV viewers by 2024.

Reaching and engaging that skyrocketing audience is a critical priority for all kinds of advertisers. But TV advertising historically excluded companies based on size and resources; it was only major international conglomerates, hyper-visible car companies, and the Coca-Colas and Pepsis of the world that could afford linear TV advertising. In addition to wildly high price tags, linear TV cast the widest possible net to a broad viewing audience. Without targeting capabilities or attributable results, there was no way for smaller advertisers to break into the linear TV world.

Combining the programmatic and OTT advertising worlds turns the linear TV model on its head. Instead of requiring huge up-front ad spend and the resources to sustain long-term brand awareness campaigns, programmatic OTT advertising allows brands of all sizes to launch targeted, traceable, performance campaigns to TV-viewing consumers.

Ushering In the Democratization of TV

Programmatic OTT levels the playing field by making TV advertising a viable option for smaller companies. This democratization benefits advertisers, publishers, and consumers alike by placing the right ads at the right time. 

Television viewers receive relevant advertisements from brands they’re likely to want to do business with. Publishers — in this case streaming services, CTV platforms, etc. — increase revenue by selling ad inventory directly to brands and retain consumers by delivering improved overall viewing experiences. Advertisers receive a whole host of benefits that were previously unavailable to newer and smaller companies, like:

  • Direct media buying: OTT media buying eliminates the middleman so advertisers can reach streaming media audiences directly.
  • Targeting capabilities: Unlike linear TV ads, programmatic OTT allows advertisers to target and retarget specific audience segments.
  • Cost efficiency: Automated real-time bidding gives advertisers control over their investment and leads to increased ROAS.
  • Performance control: Use levers to meet specific campaign goals like attribution window values, first- and third-party data integration, etc.
  • Transparency: Trace the path from ad exposure to outcome and track your investments along the way.
  • Incrementality testing: Build confidence in your efforts by testing CTV campaign performance against other channels.

Partnering with tvScientific can help brands big and small realize those benefits and take full advantage of all the OTT programmatic advertising world has to offer. Our first-of-its-kind proprietary performance advertising platform combines the reach of television with the measurement and attribution capabilities that modern advertising demands. Ready to work with the experts at tvScientific on your OTT programmatic advertising strategy? Get in touch today.

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