Programmatic advertising on streaming continues to grow, with the U.S. seeing a 37% increase last year. However, the technology used for programmatic buying was built for display, not streaming. Just like we wouldn’t expect TV ads – with full sight, sound, and motion – to transact the same way as two-dimensional newspaper ads, we need to evolve the way that we transact streaming TV programmatically and innovate on the entire ad buying decisioning process.

Currently, most DSPs and SSPs use "slot bidding," where each ad opportunity is bid on individually. This works for display ads but is inefficient for streaming, where a single request can represent multiple opportunities, and leads to high costs and missed opportunities. The good news is that the industry can embrace a new opportunity: Dynamic Ad Podding.

What is dynamic ad podding?

Unlike display ads, streaming ads are categorized by length. Within a program, whether it's a 90-minute movie or a 30-minute episode, there are multiple ad pods containing individual ad slots. A pod can have a maximum duration (e.g., 2 minutes) or a maximum number of ads (e.g., six ads). In the current state of slot bidding, all the different permutations are being represented and decisioned on by the buy-side individually, without context to the commercial break length itself. As a result, a buy-side system has no context when it is bidding for the same opportunity, sending through too much demand for a slot and too little across a stream.

For example, when a viewer watches an episode of Real Housewives of Beverly Hills on Peacock, a bid request for each potential ad slot in a two-minute commercial break is sent out individually. These requests pass through multiple mediation layers (SSPs, ad servers, DSPs), duplicating into hundreds of bid requests, which are then sent back to the same initial ad server, which then does the work to combine all the opportunities into a single stream for the player.

Dynamic ad podding allows for a more effective way to look at ads within an ad break more cohesively.
 
Treat ad buying more like airline booking
Imagine booking a flight where the booking system listed seats individually without any connection to the flight or route itself. Consumers would have no information of which class the seat was in, where the seat was physically situated on the flight – and ultimately since they had no real-time information on the availability of the seat – they'd have to send multiple requests for seats to ensure they could even get on the flight.

Fortunately, this is not the process that customers endure when booking flights today, but it better reflects an advertiser’s experience when buying programmatic ads on streaming. With ad podding, the industry is simplifying the experience, making it more like airline booking. Rather than bidding on individual ad slots, advertisers get a single opportunity that includes all available ad opportunities within a given ad pod as a single unit (or ticket information like classes, routes, flight information, etc.) In the buying process, advertisers have all the information available needed to make an informed decision without any pertinent information being obfuscated by the partners involved in the transaction. This helps buyers secure spots for their potential ads, increasing the likelihood of the ad campaign delivering and for the publishers to best monetize the ad opportunity.

It happens in two steps: a bid request for the entire ad pod is sent to a DSP, which returns all available ad opportunities. The ad decisioning tech then selects the creative for the entire pod. This is not only immensely more efficient, but it’s also more scalable.

Why the industry should adopt an ad podding approach
While dynamic ad podding is a more efficient approach for advertisers and publishers, it drives value for the industry far beyond that:

- Efficiency: Fewer intermediaries and duplicate requests reduce tech fees.  

- Better Delivery: More context on ad slots helps buyers ensure they reach their target audience and ensures publishers can monetize their premium inventory. 

- More working media: Better understanding of true available inventory for smarter bidding and removal of additional tech fees.

- Improved viewer experience: Holistic decisioning across the entirety of pod helps manage frequency and improves the viewer experience.

- More direct access to live inventory: Reduction in requests being sent to DSPs, reducing latency during live events when spikes in viewership can max out DSPs servers.

DSPs also benefit with improved bid win rates, boosted performance, and revenue: FreeWheel campaign data shows a 32% decrease in bid requests and a 170% increase in bids won with ad podding.

Making the future of streaming TV advertising easier
Streaming only continues to grow, especially with live events shifting to these platforms—creating more opportunities for advertisers. To improve the experience for buyers and viewers, the buying technology must evolve. Beyond enabling ad podding, technology partners need to update ad decisioning logic to focus on pods instead of slots, as current algorithms are built for display ads. This will be key to driving its success.

Ensuring the best ways to send all available impressions and ad opportunities benefits advertisers and publishers alike by enhancing fill rates, improving monetization, improving the viewer experience, and driving more demand diversity.

Dynamic ad podding moves the industry toward a more efficient, cost-effective future with better reach and a cleaner supply chain.