PubMatic Takes On DSPs in Video & CTV Deals, Aims for Direct Access

PubMatic has introduced a new product called Activate, which allows brands and agencies to purchase CTV and online video inventory directly through the SSP. This is similar to Magnite’s ClearLine and The Trade Desk’s OpenPath, providing an end-to-end solution for buying inventory. Unlike real-time bidding, Activate supports direct deals, including programmatic guaranteed and private marketplaces. PubMatic is positioning Activate as a supply path optimization (SPO) solution, which involves removing intermediaries from the supply chain.

According to PubMatic, Activate has the potential to boost revenue for both publishers and buyers. The new product eliminates intermediary costs associated with the bidding process and addresses outdated transaction methods currently used in CTV and video. Almost 60 percent of CTV and 18 percent of online video transactions are non-programmatic. By enabling programmatic guaranteed and private marketplaces, Activate could unlock $65 billion in programmatic spend. PubMatic co-founder and CEO Rajeev Goel said,

By seamlessly connecting buyers and content owners via a single layer of technology, we are significantly reducing the hops, discrepancies, data proliferation, opacity, and complexity in the programmatic marketplace. This will result in higher ROI for buyers and increased revenue for publishers, consistent with our mission to fuel the endless potential of internet content creators who rely on advertising as a primary source of revenue.

Read more: Connected TV Ad Fraud: Is It Real And How To Avoid It?

How does it work?

Activate works by providing buyers with access to available inventory and the ability to apply their own first-party data to target relevant audiences. Buyers can then activate their campaigns and access reporting and analytics for optimization purposes. One key feature is that buyers can use their preferred ad server. In return for the service, PubMatic collects a percentage of the advertiser’s spend, but is also considering subscription models.

Ad agencies Dentsu, Havas, and OMG Germany, along with CPG brand Mars, LG, and Fubo, are among the launch partners of Activate. Mars gains enhanced budget control with Activate, while Fubo embraces increased transparency for media owners.

The CTV and online video market

Both PubMatic’s Activate and Magnite’s ClearLine are concentrated on video placements, encompassing CTV (Connected TV) and online video. Currently, the majority of CTV inventory is acquired through direct deals rather than programmatic methods. PubMatic estimates that 57% of the $65 billion global CTV market is currently transacted via direct insertion orders. That’s $37 billion just waiting to go programmatic. PubMatic also estimates that roughly 18% of the $150 billion online video market, or $28 billion, is transacted via direct IOs. The decision of PubMatic and Magnite to prioritize end-to-end solutions for CTV suggests that Demand-Side Platforms (DSPs) may have certain limitations or challenges in effectively addressing the CTV market.

The development of Activate took PubMatic 18 months, with the acquisition of measurement and reporting platform Martin in September 2020 helping to accelerate the process. The Martin deal provided PubMatic with additional expertise on the challenges faced by agencies and advertisers in campaign planning, as well as buy-side workflow tools, analytics, and optimization technology. Additionally, with the decline in third-party data availability due to regulatory changes and device manufacturer policies, direct access to first-party publisher data has become even more valuable for advertisers. The solution leverages this first-party data to provide advertisers with enhanced control and insights for their campaigns.