How Are Brands Using Programmatic Advertising on OTT?
Brands are increasingly leveraging programmatic advertising on OTT platforms through expanded addressable advertising capabilities, strategic partnerships like NBCUniversal with Charter Communications and Taboola with Sinclair Broadcast Group, and industry consolidations such as Magnite's acquisition of SpotX, enabling targeted, data-driven ads to millions of households and enhancing revenue opportunities while addressing challenges like ad fraud.
Programmatic advertising is powerful, and when combined with over-the-top (OTT) media, the format has the potential to do wonders for brands.
Ad tech companies are expanding their programmatic capabilities on OTT. As new deals take place, brands are starting to experiment with this way of advertising.
Latest Developments in Programmatic Advertising on OTT
Starting Q2 2021, NBCUniversal will increase its number of reachable households with addressable advertising. Addressable advertising allows companies to serve different, targeted ads to different households watching the same shows. Ads can be based on geography, purchasing history, and other data points.
Partnering with Charter Communications—the number two cable provider in the U.S.—NBCUniversal will be able to serve addressable ads to 45 million households.
Magnite is buying SpotX to broaden its capabilities in the programmatic ad space on streaming services. Once the deal is complete (2nd quarter 2021), the company says it will be the largest independent CTV and video ad platform in the programmatic space.
Connected TV (CTV) advertising is currently not Magnite’s biggest source of revenue, but it’s the “crown jewel” of opportunity. According to Magnite, CTV revenue grew 50% in Q3 2020, and the number of CTV advertisers using targeting features grew two and a half times between Q3 2019 and the same time period in 2020.
Magnite also recently released the beta of Unified Decisioning, a system that allows buyers to manage direct and programmatic purchases simultaneously within OTT.
Taboola renewed its partnership with Sinclair Broadcast Group. According to Taboola, the partnership will result in Sinclair using Taboola’s discovery platform and suite of products across their television station sites including its ABC, CBS, FOX and NBC affiliates, as well as its mobile platforms, to optimize user engagement, increase audience loyalty and drive revenue.
For advertisers concerned about ad fraud in the programmatic space, BidMind by Fiksu, a Connected TV/OTT advertising platform, is addressing those issues. The company is now using Pixalate to thwart invalid traffic in OTT advertising.
“Cooperation with Pixalate will help us take media buying to the next level making advertisers sure that every dollar of the ad campaign will pay off, and that fraudulent traffic will be reduced,” explained Anna Kuzmenko, COO at Fiksu.
MediaRadar Insights
Though streaming has been around for more than a decade, the technology used to serve ads is growing more sophisticated each year. With each new step in ad tech’s maturing process, brands are spending more, or at least willing to try something new.
In January and February, spend in programmatic advertising on OTT platforms increased 5% from $85 million to $89 million year-over-year.
Though the increase in spend is modest, the number of brands using this form of advertising grew dramatically. The number of buying brands increased about 60% in the span of a year (3,500 in 2020 vs 5,600 in 2021). This suggests that brands are willing to dip their toes in, but aren’t ready to heavily invest in programmatic across OTT.
The top 10 spending brands year-over-year made up nearly the same percentage of spend (14% in 2020 and 12% in 2021), leaving over 5,000 brands spending about $80 million programmatically in OTT.
The top five spending categories in 2021 make up 66% of programmatic ad spend. They are:
- Finance
- Tech
- Media
- Retail
- Professional services
These categories include brands such as Fidelity Trading, Microsoft Teams, Apple News+, Subway, and Weight Watchers.
Important note: This dataset excludes programmatic ad spend on Hulu
For more creative examples and spend details, check out an advertiser’s profile using a custom demo.
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Related
What Is Programmatic OTT and Why Is It Important for Brands?
Programmatic OTT combines automated, real-time ad buying with streaming service delivery, enabling brands to target viewers on platforms like Hulu, Disney+, and HBO Max more effectively as OTT usage surges and traditional pay TV declines, making it a crucial advertising channel projected to generate over $242 billion by 2028.
The 2 Biggest Programmatic Trends We've Seen in 2021
In 2021, marketers significantly increased programmatic advertising budgets to enhance flexibility and efficiency, with direct-to-consumer (DTC) brands notably boosting their spending by 26% to $879 million through premium formats like Amazon DSP, while TV advertisers began leveraging over-the-top (OTT) platforms to optimize addressable TV campaigns by targeting households more precisely.
How Streaming is Promoted Via Ad Tech
In 2021, streaming services like Hulu, Paramount+, and HBO Max revamped their brands and strategies—focusing on original content, affordability, and user experience—to stand out in a crowded market of over 200 options, while heavily investing in programmatic advertising to attract subscribers amid growing consumer subscription fatigue.
12 Ads ‘til New Year: 10 Biggest Programmatic Advertisers
In 2020, amid the pandemic-driven shift to flexible and targeted marketing, the top ten programmatic advertisers collectively spent $153 million, with Lending Tree leading at $23 million by addressing financial struggles, followed by Wix's Editor X platform at $18 million, and GEICO Insurance at $16 million capitalizing on increased insurance plan switching.
Which Brands are Investing in Programmatic OTT?
Advertising leaders predict programmatic buying, especially programmatic OTT, will be central to media strategies in 2021, with brands like Warby Parker leveraging it to boost online sales amid store closures and Subaru using it to promote charitable campaigns supporting Feeding America.
Consumers love streaming: How much overlap is there between OTT and digital ad spend?
During the COVID-19 pandemic, consumer streaming on OTT and CTV platforms surged, prompting advertisers to shift significant portions of their upfront ad budgets—often 25-30%—from traditional TV and digital display to video ads on both network-affiliated streaming services and streaming-only platforms like Amazon, Roku, and YouTube, with minimal overlap between OTT and digital ad spend despite increased consumer attention to video content.