Slowly but surely, television ads are being bought and sold digitally, with some of the biggest brands from the consumer electronics industry making their way into ad tech.
Samsung Ads is now selling its inventory programmatically through a deal with SpotX in a tie-up that lets advertisers access media on more than 50 million of the Korean giant’s smart TVs in the U.S., either directly or programmatically.
Joe Melaragno, head of platform sales and agency development at Samsung Ads, said most big brand advertisers tend not to purchase connected TV (CTV) ad inventory on open ad exchanges—the way they might buy display or traditional online video—because of a lack of availability, plus concerns around brand safety.
The relationship between supply and demand is different in CTV compared to digital advertising on desktop, where inventory is seemingly limitless and ad exchanges were historically used to sell inventory that could otherwise go unmonetized.
“There’s only one ad at a time if it’s a full-screen video ad on a TV, so you don’t get into that race of optimization and putting multiple ads on a page you see in display,” Melaragno said.
Bringing ad tech into TV doesn’t mean automatically firing up the open exchange to the same extent as with desktop. Media owners value the stability that comes with securing upfront revenue, and buyers face obstacles unique to the medium. For example, premium CTV inventory, like sports and primetime shows, are often snatched up early in upfront negotiations, and rules like competitive separation put limitations on the access to supply.
“We think there are certainly partners who are going to want to make sure they lock up inventory ahead of time. While having flexibility is good, when you have that flexibility you don’t know what price you’re going to have to pay,” said Melaragno, who believes that private marketplaces are “the best way” advertisers can scale out their CTV buys.
Melaragno added that the upfront marketplace “will probably lock a little later” than usual due to the economic impact of coronavirus. Advertisers are planning on spending 33% less in this year’s upfront, according to a survey from Advertiser Perceptions.
Mike Laband, svp of platform at SpotX, said 90% of OTT spend his company sees is transacted through private marketplaces.
“A lot of more linear type of buyers that are jumping into OTT want to work really closely with the media owner. They find the private marketplace route is an execution that’s much more attractive to them, versus trying to buy across the open marketplace, which can be a little more challenging, and they prefer the one-to-one relationship,” Laband said.
So far, SpotX is the only monetization partner that Samsung Ads, the advanced TV sales group within Samsung, has brought on board.
Samsung Ads controls an undisclosed amount of inventory from the ad-supported apps on Samsung smart TVs, including Samsung TV Plus, the free, ad-supported streaming service built into the TV.
Smart TV makers are ramping up their ad practices as they face increasing competition for market share from the likes of Roku and Amazon Fire TV. Vizio launched an ad business in December, and LG started selling native ads on its platform through Tremor Video last September.