Co-Founder and President of Adnimation, Tomer Treves, discusses the world of CTV monetization, access to Google’s CTV demand, and how CTV publishers can maximize their CTV ad revenue.
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You can read the transcript of the talk below.
How can CTV publishers maximize their ad revenue?
It’s a really “simple” question. Just how do you turn a business into a successful business?
So what we’re seeing is CTV as a new thing, but it’s actually history repeating itself. We’ve seen it before when websites started to monetize, and then when mobile apps started to monetize, and then when mobile websites started to monetize, and today we’re seeing it all over again.
You take good content and bring real viewers. And today it’s on big connected televisions. How do you monetize? You give high quality content and you sell some of the users’ attention to advertisers who finance the whole thing.
The question, “how does a CTV app make money?” is through a combination of a lot of technology and sales processes to take that small portion of attention from the users and sell it for the highest prices possible to relevant advertisers. Now, let’s dive in with more accurate questions.
If I’m a CTV publisher right now, I have a really great channel. I have tens of thousands, millions, of viewers per month. And I want to get the most I can for my ad revenue. What avenues will I pursue?
For a CTV publisher to make money, they need a combination of first, an ad server that will deliver the video ads in the timing selected within the video content; and a smart combination of good advertising demand sources that will bid potential prices on the video slots; and the process to run a very strong auction to leverage the competition between advertisers into potentially the highest prices for the user’s attention.
As a CTV publisher. It requires a combination of technology and service. If they have the ability to do it in-house, they will need someone to manage the technological aspects of implementing the ad server and then running an auction before, within, and maybe even after, and a series of agreements with demand sources where they will have a difficulty to maximize the terms and get approved into all the top-league advertising sources.
So it is possible to do it independently and it is possible to do it with a company like Adnimation that helps solve the entire challenge of monetization from technology through service and all the way to financial and connection.
Let’s talk more about the demand partners. We know that advertisers are willing to pay very high CPMs in order to access publishers’ ad inventory, and we will talk more about that in a second.
But let’s talk about Google. Everybody knows Google is the largest marketplace in the world for ads. How do publishers access the largest amount of demands in order to leverage competition and drive prices?
Google, in this case, has been a little late to join the party. The CTV party started two, three years ago. We already see a lot of video advertisers and marketplaces that are active.
Google advertisers specifically for connected television and big screens were not an active part of this big auction for CTV. They have joined late, but as we’ve seen before, once they do join, the potential is huge.
This is because advertisers normally allocate a big part of their advertising budget to the Google marketplace. And today there’s an option to click the box to add CTV to their media mix.
And once they did that, and they already did, there is a lot of video demand for big screens and CTV within the Google marketplace. However, it is not widely available for CTV publishers. To the best of my knowledge, only a select few very large CTV publishers, and I’m talking about National Geographic level, have access to this demand.
Most other CTV publishers do not have access to Google advertisers for CTV. So they only have CTV advertisers through other marketplaces.
And Adnimation offers a unique access to this pool of advertisers to add to existing advertisers, both to win a lot of the inventory and to act as competition to others and push their prices up.
So in other words, you’re saying that Adnimation has access to Google’s CTV video demand?
Adnimation is a good partner of a of Google, I think. And that is why they allowed us to be one of the first, if not the first, partners to offer Google advertisers to CTV apps.
So, yes, CTV publishers, if they have good apps with good viewers, original content, and real people who view the content, they can partner with Adnimation to have this unique access to a very wide list of Google advertisers, specifically for CTV.
I’m just curious, it seems that Adnimation is one of the only companies in the world to have access to this. How come they’re not just giving everybody access and saying, okay, these are our demands, go nuts?
I love Google. they’re a good company. And when you spend a lot of hours with them, you learn that they see themselves as a technology company. And they have many employees, but in their eyes, they’re a small company and they don’t have the internal resources to work with thousands of publishers.
Just imagine in the website world, if you’re trying to access AdSense support to get to speak with someone there, it’s almost impossible because they don’t want to work with many thousands of publishers.
And it’s not different in CTV. They build the technology. They are an enabler, they build a marketplace, they bring the advertisers, they bring a lot of value to the ecosystem. But at the end of the day, they don’t have the capacity to work hand in hand with thousands of publishers.
That’s why they have the channel for partners. And Adnimation is part of that channel. And they partner with us to do that last mile of engagement and contact with the publishers.
Can you talk a little bit out of your experience of using the technology that Adnimation offers and this unique Google product, and what it was able to do for the publishers?
So in the last 12 months, it was amazing. It started off as, you know, as a trial. We connected Google advertisers for CTV to several CTV apps and we saw something that we couldn’t believe was possible because the advertisers were paying very high CPMs.
We were almost immediately able to buy 20, 30, even 40% of the available ad inventory for those apps. So it was a new source of CTV ad revenue for those publishers.
And moreover, even when they don’t pay, because the CPMs were relatively high, they gave strong competition to advertisers through other platforms, and the prices from those advertisers went up and were maximized.
So we’ve seen what we’ve seen before with apps and with websites that the advertisers that we bring from the Google marketplace win many ad slots with high prices.
And when they don’t win, they help publishers get higher prices from other advertisers.
Let’s talk about a little about these CPMs. Where we’re seeing very high CPMs from advertisers on CTV. Why do you think they’re willing to pay so much?
It’s an interesting question. Thank you, Eytan. The publishers online for websites and apps are used to be able to measure the results very closely and analyze the ROI and do very targeted campaigns. And the CPMs there are linked closely to the results
In the traditional television world, in contrast, you’ll just buy slots and millions of viewers, and it’s very difficult to measure the effectiveness of campaigns. And so, traditional advertising campaigns on TV used to spend millions of dollars, get little information about the exposure, and they were used to pay a very high price when you actually calculate them per viewers or CPM based.
Now, in the last one or two years, we see a migration of the viewers from traditional television to CTV and the advertisers follow. So these are advertisers who take the budgets that they used to do put on traditional television, and they put it on connected TV. And there, they bring the prices that they used to pay on television.
Now, with the ability to better target who’s watching and when, they get a much better return on their investment, so they’re still willing to pay CPMs closer to the traditional TV world than to the online world. And so, the CPMs there are much higher than what we can get on regular video ads in a website, for example.
Regarding the implementation, I understand that it’s not so simple. It’s not just enough to have access to this special product from Google, you need to have the technology to implement.
Can you talk about some of the challenges that go into this?
I hope that within a year, two or three, it will be much easier. But at the moment, since the CTV advertising and monetization world is still a relatively new ecosystem, it does take several technological steps to build a right solution for monetization that is maximized. Because we still don’t have header bidding for CTV and we still don’t have a good APIs connecting between the different ad servers and the other solutions.
And for the publishers, there is still not a good standard to share the available information on the session with the exchanges so advertisers will be able to better target.
With the lack of information and lack of connect ability between the ad server and the other systems, and with the in the absence of header bidding, the publisher needs to do much more in the technological aspect.
And many times they don’t they don’t take that extra effort. They just put in an ad server and they suffice with the demand that this ad server brings with them and that’s it. They just let it run and it’s very far from optimal. In 90% of the cases that we meet with a CTV publisher, we see that they can earn much more, sometimes double and even more than that.
What do you say to publishers that are a bit reluctant to do this because of this technological challenge?
I hear you. You know, Adnimation was founded to be in the publisher’s corner, and I understand this pain.
They want to work on content, create amazing video content, get the viewers engaged with them. They don’t want to spend most of the time on building the ad tech infrastructure to maximize ad revenue.
But I have to remind them that they are businesses as well, and they need higher ad revenue to survive and to thrive. And this is why Adnimation is here. And there are a few others solutions as well. But at the end of the day, when we partner with a publisher, they like us immediately because we take that ad tech headache off their shoulders.
And this was true with websites and apps, and now it’s true with CTV apps as well. When they see the numbers and see that we doubled their ad revenue, they fall in love and they stay in partnership with us for years.
What are the CPMs for CTV? People talking about how high the CPMs are?
There’s not a specific answer [because it depends on so many variables], but we can see that, relatively speaking, when compared to traditional websites and mobile apps, we’re talking much higher CPMs. And in high seasons, for example, before the midterm elections and when there are political campaigns that search for wide audiences, CPMs can go very high. Double digits and even closer to triple.
It’s much higher than where we’re used to in the online and mobile apps world.