Clients’ pricing models often favor cheaper CPMs… the challenge is streaming video is expensive 

Anonymous townhall participant

It’s one where sellers’ ability to offer granular measurement of ROAS, and decipher how CPMs are structured, matters as much as the stars of a primetime show when it comes to winning the lion’s share of advertiser budgets. As ad spend on streaming prepares to surpass media investment on linear TV at the upfront negotiations, this is especially the case.

Earlier this week, such debate dominated Digiday’s first-ever CTV Ad Strategies event, hosted in midtown Manhattan, where attendees voiced their frustrations about the fusion of these previously distinct worlds, as well as their successes.

Chief among attendees’ complaints were figuring out just how costs are tallied, proving ROI in a timely manner (especially when walled gardens predominate), and securing transparency over ad placements. Below is a more itemized overview of what’s on buyers’ minds, including those speaking from the stage as well as participants speaking under the Chatham House Rule at the accompanying Digiday town hall.    

50% of 2025 upfront spend will be on streaming

Dani Benowitz, IPG Mediabrands’ global chief negotiations officer, told attendees the shift in audience and budgets toward streaming was at “a tipping point,” but noted that evolution would continue to be gradual. 

“We believe that 50%, if not more, of the [2025] upfront dollars – not all year –  have gone to streaming,” she said on the conference stage, further predicting that the introduction of sports content to streaming services has been a catalyst.  

“My team has estimated that about $12 billion [in ad spend] will go against streaming, and they anticipate that to grow double-digits to about $14 [billion] in 2026. If that happens, then it will be about 30% of the money.” 

For programmatic, it’s ‘a buyer’s market’  

Meanwhile, Skyler McGill, head of programmatic & video, Wpromote, observed how the maturing nature of programmatic trading meant that buyers are (generally) consolidating the number of platform partnerships they engage in.

He told Digiday executive editor and the event’s host Tim Peterson that buyers are typically limiting the number of demand-side platforms they work with to three or below – typically, these are: Amazon DSP, Google DV 360, or The Trade Desk. 

“The real goal is to consolidate as much as possible,” he said on the conference stage. “Usually, we’re going to be on one or two platforms at most, if we can … It’s dependent on client-strategy.” 

Indeed, it is this dynamic that means buyer teams are finding success in getting DSPs to lower their markups, including on their tech and data fees. “It’s almost like a buyer’s market,” he said in answer to Peterson’s question.  

Fellow speaker Kevin Manke, director of media, data & operations at Danone, voiced how marketers are thinking similarly as a means of more efficiently managing their reach and frequency with media spend. “[This is about] understanding how many ads it takes for customers to take action,” he added, when asked about the CPG’s near-term brand goals. 

Higher premiums will require better data 

While the overall increase in CTV ad spend will be in the range of $30 billion in the U.S. this year, depending on the eventual tariff regime, per eMarketer, reaching the upper end of this range will also rely on media owners’ ability to share the depth of audience insights advertisers are really after.   

Celeste Castle, evp, head of research & measurement with Dentsu, told the audience “you need to share information” if high asking prices are to be justified.

She added, “We need content consumption metrics … it doesn’t need to be as granular as show-level data. What are the holdups? It could be a number of things … but the opportunity to do better [is to] share information.” 

It is perhaps the lack of transparency in fee structures that confuses clients, who often don’t understand where the fees are coming from, that is hampering advertisers’ willingness to (literally) buy into the hype of CTV.  

During the conference’s town hall session, where participants are quoted anonymously to encourage candid conversation, those present discussed the challenges of justifying higher CPMs to clients and the importance of informed decision-making through thorough research and RFPs.

One media agency executive further noted the complexities involved in pricing, with issues around pricing often subject to matters beyond their control – a scenario that can result in sourcing media inventory of questionable quality. 

“Whether you buy direct or programmatic, but CPMs are higher than a linear TV buy or display buy,” observed the participant. “And clients’ [pricing] models often favor cheaper CPMs… the challenge is streaming video is expensive” 

Speaking at a separate onstage session, Marcy Greenberger, chief investment officer, UM Worldwide, voiced a similar sentiment, especially when attempting to establish the ROI of CTV ad spend. “I think it’s hard to sometimes diagnose what’s working and what’s not,” she said. “With CTV, we just don’t have the transparency to make that work.”

https://digiday.com/?p=583420