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How a forward market approach could transform CTV advertising

A hand turns a dial on a TV screen while progress bars aligned with various ad-buying metrics are pushed and pulled back and forth by businesspeople.

Illustration by Nick DeSantis / Getty / The Current

Last spring, the global media agency Initiative tested a new approach to programmatic ad-buying for their client, a major telecommunications company. The goal was to navigate the complexities of upfront buying to allow the client to reserve their desired audience — well in advance of needing it — and at the same time use decisioned, data-driven buying.

Theoretically, the approach would offer the same guarantee that a traditional upfront deal might offer and give the advertiser real-time control over who would see their ads across different streaming platforms. In short, they’d get the best of both worlds. The idea of an addressable upfront takes its inspiration from the financial markets, and in particular the notion of a forward contract — a contract between two parties to buy an asset at a specified price on a future date.

The agency and their client were keen to test this new approach, says Carl Strum, a director at Initiative, who managed the telecom campaign for its two-month run. “When we ran the forward-market [campaign], we saw that the delivery was remarkably stable from start to end,” Strum tells The Current. “What excited us about [this approach] is the promise of controlled delivery and costs while being able to use all of the great features that PMP deals enable for us, such as targeting, frequency capping, and testing.”

Strum describes the forward-market buys as a middle way that can allow an advertiser to reserve the audience they want (as they might do with a programmatic guaranteed (PG), or direct deal, to run against, say, NBC’s Sunday Night Football), while getting the benefits of a private marketplace (PMP) deal that can allow for transparency, price discovery, and flexibility.

What’s likely driving this transformation of the upfront marketplace is the growth of ad-supported streaming platforms. With the launch of ad tiers by the likes of Netflix and Disney+, the CTV ad opportunity has become bigger than ever, according to Insider Intelligence. “It feels like a turning point because advertisers and publishers both understand that it’s not just having an upfront buy and setting those to direct buys and treating everything like it’s linear,” says Strum. Neither, he says, is this just about programmatic trading focused solely on “hitting a specific audience regardless of content.”

And on the publisher side, many streaming platforms are keen to promote the benefits of running campaigns against their content. “The thing that sets connected TV and streaming apart is we can actually activate on an audience,” Lynette Kaylor, SVP and head of North American ad sles at FuboTV, tells The Current. “We know for FuboTV, we're 100 percent logged in, we're 100 percent addressable. We know who's watching that TV at all times. And so, we can then measure that on the back end and…really prove the value of our audience and why you need to advertise with us.”

As a sports-focused streaming platform, FuboTV offers over 55,000 live sporting events each year, which for advertisers are “highly coveted spots,” says Kaylor. But what happens after the match is over, or after the NFL season ends? “We have the data to say, well, they’re no longer watching football, but they are watching X, Y, and Z so we can still target those people outside of the live sports,” she says.

A key challenge for this new marketplace is measurement, as publishers and advertisers look to different identity solutions on which to transact, going beyond the traditional age and gender demographics of linear. “One of the difficulties is that we’re all buying on different currencies…it’s hard to measure across everything when we’re using different data points,” says Kaylor. “However, I think we’ll get closer, and it’ll be a continuously evolving atmosphere.”

It’s certainly top-of mind for streaming platforms and presented as a key value proposition for advertisers. In January, Disney announced it was advancing Hulu’s ad targeting capabilities and said it was “laser focused on expanding measurement, which is [still] super complicated,” according to comments made by Rita Ferro, president of Disney’s ad sales division. Meanwhile, NBCU added new measurement partner VideoAmp as “a currency option for cross-platform advanced audience measurement,” reported Ad Age.

As the complex CTV ecosystem evolves into a new kind of marketplace, Strum is encouraged by the early results of the agency and its partners “forward market” approach to buying ads. “We interpreted this as a way for us to be able to go to publishers with audience-driven planning and provide them with assurance of budget delivery,” he says. “It’s a way we can deliver on a buy and have it [transacted as] PMP, but we’re able to provide audience parameters while building out a deal so that a lot of guesswork is reduced and handled at the start of the campaign.”