Programmatic is dead in CTV due to the failure to deliver revenues to the value

The programmatic ecosystem in Connected TV (CTV) advertising has been a subject of debate, with some arguing that it is becoming obsolete due to various inefficiencies. Here’s an exploration of the challenges facing programmatic CTV and the potential benefits of employing a sales team for FAST (Free Ad-Supported Streaming TV) channels.

Inefficiencies in Programmatic CTV Ad-Fill

Programmatic CTV advertising has been criticized for its inefficiencies, particularly in ad-fill rates. The fragmentation of control by ad campaign owners and the involvement of numerous independent companies in each deal can lead to significant revenue deductions before the money reaches broadcasters or channel operators. This fragmentation creates complexity and inefficiency, as each layer in the transaction takes a cut of the revenue, diminishing the final amount that reaches content providers.

Fragmentation and Revenue Dilution

The CTV landscape is highly fragmented, with a plethora of platforms, services, and devices. This fragmentation can lead to a dilution of ad campaign revenue, as multiple intermediaries are involved in the ad delivery process. The involvement of various demand-side platforms (DSPs), supply-side platforms (SSPs), ad exchanges, and other intermediaries means that a significant portion of the ad spend is consumed by these entities rather than being allocated to the actual ad placement.

Programmatic vs. Sales Team Approach

While programmatic advertising offers automation and efficiency in buying and selling ad space, it is often seen as a “lazy” approach compared to having a dedicated sales team. A sales team can engage in direct negotiations, foster relationships with advertisers, and potentially secure better deals that are more aligned with the content and audience of the FAST channel.

The Case for Sales Teams in FAST Channels

FAST channels, which provide free streaming content supported by ads, could benefit from a sales team approach. A dedicated team can tailor ad packages to suit specific channels, negotiate higher rates, and ensure that ads are relevant to the audience, thus potentially increasing the value of ad inventory. Moreover, sales teams can offer a level of service and customization that programmatic platforms cannot match, leading to more effective ad campaigns and higher revenue for the channel operators.

Conclusion

The debate between programmatic and sales team approaches in CTV advertising is ongoing. While programmatic advertising offers certain advantages in terms of automation and data-driven targeting, the inefficiencies and revenue dilution associated with it cannot be overlooked. For FAST channels looking to maximize their ad revenue, employing a sales team could be a more lucrative strategy, offering greater control and the potential for higher returns on ad inventory.

In summary, while programmatic CTV advertising has its place in the market, the inefficiencies and fragmentation it brings to the table suggest that a more hands-on approach with a dedicated sales team could lead to better financial outcomes for FAST channels.