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As connected TV (CTV) providers dive deeper into ad tech, a rising proportion of the ads served on TV screens are being transacted programmatically. In the latest example of this trend, Samsung Ads announced on Tuesday that it would begin selling inventory programmatically across its 50 million smart TVs in the US, according to AdExchanger. Samsung tapped video supply-side platform (SSP) SpotX as its initial monetization partner.
Samsung probably would have launched a programmatic option eventually, but the company noted that two pandemic-driven factors caused it to launch now:
- Media buyers are gravitating away from long-term budget commitments and toward more flexible digital channels. By introducing a programmatic option for CTV, Samsung is well-positioned to take advantage of that shift, as it presents advertisers with a lower-risk alternative that still runs on a TV screen. For context, major advertisers like Pepsi and GM are already reportedly thinking about withdrawing TV upfront commitments in Q3. And as an indication of broader sentiment, nearly half (48%) of advertisers said that networks shouldn’t expect a commitment of more than 90 days worth of inventory this year, according to an Advertiser Perceptions survey shared with Insider Intelligence. To that end, Samsung Ads exec Joe Melaragno told AdExchanger that “The fewer budgets that are locked in ahead of time, the more budgets that are in play on a quarter to quarter basis.”
- Homebound consumers have sparked a surge in available inventory. An increase in time spent with CTV devices means an increase in purchasable inventory — and that’s particularly key as insufficient inventory has previously been a roadblock to greater advertiser investment in the medium. Samsung ads reportedly observed a 70% increase in viewing time, and 132% increase in weekly hours between January and April of this year. And more generally, US average time spent per day with digital video (which includes CTV devices) is forecast to grow 19.4% in 2020 to slightly more than 2 hours per day, according to eMarketer’s latest figures.
A growing number of CTV/OTT providers are expanding ad opportunities for similar reasons as Samsung — that could spur greater adoption of the channel in the long-run. In the past few months, many other CTV/OTT services had made efforts to capitalize on the recent surge in household streaming by changing how they sell inventory: For example, Roku unveiled OneView, a demand-side service leveraging the recently acquired Dataxu’s first-party data to sell its inventory, as well as inventory acquired through Dataxu, while NBCU partnered with Freewheel and the Trade Desk to sell more of its the OTT inventory on programmatic platforms.
These efforts will likely lead new advertisers to experiment with the format, as they make this inventory easier to buy and potentially more measurable. We think the resulting impact will be a greater investment in CTV/OTT channels in the future, an acceleration of an already ongoing trend: According to eMarketer’s estimates, US CTV ad spending grew 46.8% year-over-year in 2019 to over $6.5 billion.
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