The Hollywood film industry and the larger television industry are undergoing substantial transformations as traditional linear TV switches to streaming platforms.
This change, however, resembles an unstable house of cards due to the complexities of programmatic advertising. Unlike traditional targeted advertising, which ensures complete inventory usage and predictable revenue based on marketing spend, programmatic trading brings volatility and uncertainty.
Content owners and broadcasters who use programmatic advertising frequently find themselves at a disadvantage. The money lost due to the difficulties of programmatic ad filling is unsustainable, especially for local TV stations and independent content creators. These organizations are discovering that their investments in content development are not producing the expected financial returns when compared to the income generated by automated ad sales platforms, which can sometimes make more than the content creators themselves.
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Programmatic Take is Killing CTV.
Furthermore, most Connected TV (CTV) content channels have yet to recognize that platforms like YouTube may be more profitable than Free Ad-Supported Streaming TV (FAST) space. While this situation can be improved if all stakeholders work together successfully, the existing ecosystem favors ad-tech and ad-sales businesses. These companies have developed an advertising sales model that favors their own sustainability over that of content creators.
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The solution for CTV networks is to return to addressable advertising. This methodology has an established track record of success, with audiences appreciating full inventory use and advertisers preferring the traditional purchasing method. To stabilize the business and assure equitable revenue distribution, a concerted effort to simplify the advertising process and prioritize content creator profits is required. Addressable advertising might form the foundation of a new, more fair model for the broadcast and streaming industries.
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