Navigating the CTV supply matrix

The Connected TV (CTV) supply landscape, while consisting of only a few dozen publishers and distributors, can be complex, opaque and oftentimes confusing to buyers. The ultimate goal of reaching a desired household requires buyers to decide amongst a myriad of ways to purchase TV ads from going direct to a publisher all the way to programmatic buying in an real time bidded environment. Here we will break things down and help make sense of it all. We’ll also highlight a few different ways one could approach buying TV programmatically, maximize reach of all TV households, and potential pros and cons of various strategies. 

The fragmented path to your audiences

First, let’s outline why this fragmented landscape can quickly become confusing to buyers. Connected TV (CTV) ad inventory doesn’t really exist in silos, meaning there isn’t just one magical CTV platform to reach all your desired audiences. It's more like a matrix in which there are multiple paths to reach your audiences. To overly simplify, advertisers can buy ads through publishers and distributors. Traditionally, the publishers were TV Networks and distributors were the cable companies and network affiliates. In today’s world there are multiple methods through which publishers can distribute content such as linear TV networks, direct-to-consumer apps, premium video-on-demand (VOD), licensing content to other streaming apps, creating FAST channels (free ad-supported streaming TV), etc. 

Where it gets even more complicated is that in today’s world, publishers are becoming distributors through direct-to-consumer apps, like Disney+, and distributors are becoming publishers and creating their own FAST channels, like The Roku Channel. ARG!! 

Still tracking? If your head is spinning you are not alone. Many video buyers struggle with the question of what to buy in order to reach their audiences in this highly fragmented market. 

CTV Supply exists in a matrix, not in silos

We believe an easier way to look at the Connected TV landscape is through the lens of the consumer. In TV terms, this is really done through the lens of a household. In this infographic we lay out some hypothetical households to help you understand the various ways you could reach some or all of them through various supply channels.

Here we have a few CTV households. Each of them are accessing content via various smart TV devices, distributors, and publishers including: smart TV operating systems, ad-supported streaming apps and services, and access to FAST channels. In addition, a few of them are also subscribing to digital cable services aka vMVPD (virtual Multichannel Video Programming Distributor).

As you can see in this example, there are many ways to reach some or all of these households, but there isn’t one supply partner that can reach all of them. Let’s take a look at some of the ways in which a buyer could reach each of these households in this scenario. 

• Publisher approach - going to each major app/publisher to achieve reach much in the same way traditional TV buyers went to each TV network to achieve reach. Things to consider: 
  • Premium publishers can come with a premium price, but they can offer more engaged viewers, live event programming and potentially lower ad loads to help your brand stand out.
  • Major apps are increasing their ad-supported inventory in parallel with their ad-free subscription models, offering more exciting opportunities for advertisers to reach viewers in these environments.
  • The average American maintains approximately 2.9 streaming services each month¹ and publishers can have a lot of overlap with each other, so you can work with two or more publishers and end up reaching the same households.

• Distributor approach - drive reach by working with the major device manufacturers like Roku, Samsung, LG, and Vizio as most households use one primary operating system to access CTV content. Things to consider:
  • Most smart TVs aka original equipment manufacturers (OEMs) have their own FAST channels and have access to inventory within other CTV Apps that are downloaded onto the smart TV's operating system.
  • FAST inventory often has more ad supply given it is entirely supported by advertising, and in turn, can provide more scale and efficiency. However, this can also mean higher ad loads where your brand has a harder time standing out.
  • There is a broader range of content and environments where your ads can be placed, allowing for interesting contextual targeting opportunities. However, due to licensing agreements there is potentially less ability to “cherry pick.”

Opportunities within the matrix

One thing that is clear, there are many different paths to reaching consumers in this space which presents both a challenge and an opportunity. The challenge lies in determining the right mix of supply partners and supply paths for your brand, while striking the right balance between factors like premium environments, reach and frequency, and ultimately, performance. The opportunity is in finding efficiencies within the matrix. This is a primary reason why many buyers have chosen to work with DSPs, like Yahoo DSP, which offer advanced identity graphs and cross-screen measurement solutions to help them understand the following: 

• Which households are you reaching, in what environments are you reaching them, and how often are they exposed to your ads.  
• What is the overlap across channels like linear TV, connected TV, and online video, across supply partners, and across households. 
• How to optimize your CTV campaigns to remove overlap between channels and supply partners, control for frequency at the campaign level, and ultimately maximize reach and minimize wasted spend. 

Reach out to your Yahoo DSP team to learn more about how we can help you navigate the Connected TV landscape. 

‍

¹Forbes. "Top Streaming Statistics In 2024." August 2024