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Study finds open programmatic CTV ad spend slows for the first time in years


Some CTV ad spending might be facing slowing growth since rising throughout the pandemic — but agencies are expecting it to bounce back later in the year.

Analytics platform Pixalate’s Q1 report on connected TV released yesterday is showing that open programmatic CTV ad spend has declined 5% year over year — marking the first slowdown since 2019 when the company began tracking it. This year, the global spending in Q1 reached $3.2 billion, down from $3.3 billion in Q1 2022 after growing in 2020 and 2021.

Agencies are adjusting some of their programmatic CTV budgets to be flat or slightly down at this time, but it’s due more to greater economic uncertainty rather than “any big strategic shift,” explained Rob Davis, president and CMO of Novus. “Generally, we remain bullish on CTV, and its budget allocation relative to other forms of video or linear TV comes down to individual brand objectives more than any blanket approach to the medium.”

And in particular, open-market programmatic ad spending could be down due to advertisers choosing programmatic guaranteed transactions or private marketplace deals instead of open exchange deals. Toby Katcher, vp of video investment at CMI Media Group, said the guaranteed transactions and private marketplace deals give them more inventory control and improve brand safety and ad quality.

“Advertisers may access premium and curated inventory through private marketplace and programmatic guaranteed partnerships, negotiate favorable terms and guarantee that their ads are displayed in a more regulated and secure environment — all of which improve campaign effectiveness and safeguard a company’s reputation,” Katcher explained.

Kelly McAloon, associate media director of programmatic at Good Apple, agreed that PMPs are advantageous over open exchange buying, because reporting is simpler and ensures brand safety.

“While many CTV publishers cannot pass back show-level data regardless, PMPs generally allow for greater transparency and control since advertisers can dictate preferences on categories and apps — therefore better ensuring brand safety. Because of this, we’re seeing priority being shifted to PMP and programmatic guaranteed-focused buying versus open exchange,” McAloon said.

Others say these findings don’t reflect poorly on CTV — this is more the result of the overall economic outlook and clients’ need for more specificity. Both Spark Foundry and Exverus Media told Digiday that CTV investments have not slowed down for them and that they expect to grow those budgets later in the year.

“We haven’t seen a slowdown or any less prioritization for CTV,” said Lisa Giacosa, chief investment officer of Spark Foundry.“ In fact, it remains a focus for many of our clients and globally, it is growing at an even faster rate.”

“While overall advertising spend projections are being revised down due to economic softness, CTV — and particularly programmatic CTV — is considered a growth area for 2023 and especially in the second half of the year,” added Talia Arnold, managing director at Exverus Media.

Pixalate research also noted 98% of U.S. households are now reachable through open programmatic CTV ads this quarter, up from 92% in Q1 2022. In Q1 2020, only 59% of U.S. households were reachable through programmatic CTV ads.

Pixalate analyzed programmatic advertising data across more than 300 million CTV devices for this study.

https://digiday.com/?p=507218



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