Advanced television, in the form of CTV and OTT inventory, is said to combine the best elements of traditional TV (in terms of quality media content) along with the relevance of digital (in terms of hyper targeting).
The net result is a near-utopia for the media industry, with media buyers willing to pay higher inventory prices to be better placed beside premium content, while media spend returns to the industry’s trusted content providers.
The CTV sales pitch
Well, that’s the sales pitch, at least. And it’s one that was frequently reiterated at this year’s upfronts, the traditional week-long TV industry dog-and-pony show that’s beginning to resemble the NewFronts, the digital glitz-and-glamour parade designed to bring legitimacy to digital publications. Buyers at this year’s upfronts, though, noted a distinct lack of details.
Pitches like this one are also commonly employed by ad-tech vendors eager to capitalize on a fast-changing industry, as well as those keen to differentiate themselves from the densely populated programmatic landscape that many investors find increasingly undifferentiated.
For example, eMarketer notes how CTV and OTT demand would drive programmatic spend to the extent it would account for almost half of all U.S. video ad spend in 2021, topping $20 billion.
“The near 50-50 split of spending is an indicator of how eager buyers and sellers have become to capitalize on video advertising in any and all forms,” said Lauren Fisher, principal analyst at eMarketer, in a recent report.
The early CTV gold-rush is laden with complications
However, what’s also clear is that some of the more nefarious elements of ad tech are also making coin while this sector of the industry develops, and as demand for automated, data-driven TV ad placements has already outstripped supply.
For instance, the comparatively slow adoption of transparency initiatives adapted from the desktop space, such as Ads.txt, means the perpetrators of fraudulent tactics like arbitrage are free to recreate the Wild West days of programmatic by taking the lion’s share of revenue originally intended for working media.
And, ironically, server-side ad insertion (SSAI), a technical advancement designed to improve the public’s ad viewing experience on advanced TV, has inadvertently let them cover their tracks.
Simply put, this is a case of the worst of digital enjoying the best of TV: the higher inventory prices associated with CTV and OTT media buys.
But all is not lost.
Following the money
Separate sources noted how they have observed the bad actors of programmatic buying now playing their trade in the advanced TV space. One especially prevalent practice is domain spoofing, which is when ad-tech middlemen misrepresent the ad inventory they have to sell and/or engage in wild price speculation.
Ad verification outfit Pixalate estimates that as much as 500,000 of the internet’s top domains have implemented the transparency scheme Ads.txt as of mid-2018. But where Ads.txt was effective in pushing a considerable number of ad-tech bad actors to the far reaches of the desktop ecosystem, experts are witnessing their return via CTV and OTV.
“The bad actors have pivoted to environments that were a little easier to manipulate … I think there’s a few things that make it the perfect storm for them to thrive,” explained Nick Frizzell, vp brand safety and inventory operations at online ad exchange SpotX.
However, as money now moves into the CTV and OTT space, so too do the bad actors. And the slow adoption of App-ads.txt—a version of the same scheme aimed at helping to combat fraud in mobile and OTT apps—has helped ease their transition.
By contrast, a widespread adoption of App-ads.txt would require store providers themselves to provide software functions that would then let app developers construct an App-ads.txt file that could list their approved ad-tech partners.