“This is late mainstream for consumers,” says Brian Stempeck, Chief Client Officer at The Trade Desk, the demand-side platform.

Similar to when people in ever-increasing numbers began to use smartphones, there was a lag in marketers allocating ad dollars to reach them on those devices.

“We’re now in that interesting phase where media dollars start to follow. That’s what we’re seeing happen right now,” Stempeck says in this interview with Beet.TV.

As a result, The Trade Desk has seen “an explosion” of connected and OTT ad inventory.

“The amount of inventory available has gone up by ten X in the past year. That’s a game changer,” Stempeck adds.

Some of that seismic growth comes from consumers changing over, some of it from companies like Sling and Roku, which have “huge amounts of inventory and they’re moving it into programmatic.”

To access Sling inventory for its buy-side clients, The Trade Desk partners with Telaria (formerly Tremor Video). “DISH/Sling makes inventory available. We then use audience data, geo targeting, whatever the marketer really wants to hone in on. We then buy that inventory,” Stempeck says.

“The benefit of programmatic is that the marketer can now say, ‘I actually just want to target people in market for a car, or in this DMA, or this town or ZIP code’ and they can bring their own decisioning to that.”

Many advertisers still want to lock in traditional Upfront linear TV inventory deals, but they want more say in choosing certain inventory—stipulating that, say, 10% of Upfront deals are to be transacted programmatically, according to Stempeck.

Like many DSP’s, The Trade Desk cut its digital teeth on display ads back in 2009, making a big push into video in the past several years. Part of that expansion stemmed from the realization that agencies didn’t necessarily want to think of media channels in silos.

“They don’t necessarily want a mobile DSP, a video DSP, a DSP for Indonesia, a DSP for South America. They want one platform that’s global to hit all of their marketing channels,” Stempeck says. “Video is now one of the biggest channels that’s bought in our system.”

This video is part of series on developments with OTT. The series is presented by Sling Television and DISH Media Sales.  Please find more videos from the series here.  For the Sling/DISH report on OTT and the marketplace, download this report.

But, though those publishers seek higher prices normally transacted through direct or human-sold deals with advertisers, auctions are still super-relevant in the video world – and can actually bring higher returns, says one programmatic platform operator.

“An auction is actually the best place to start if you have something that’s in scarce supply,” says The Trade Desk chief client officer Brian Stempeck, in this video interview with Beet.TV. “If you’re a publisher where you’ve got video inventory going for a high CPM, it’s actually the best place to run an auction.”

Why is auctioning inventory a better way to sell it? Because, like any auction, prices go up and because, like the best auctions, you can choose where to start the bidding.

“Let’s say you’re selling it for a $15 CPM and you’re sold out, that happens at a lot of video publishers,” Stempeck continues. “They can say, ‘Let’s set the floor at $15 and see what we can get above that’.

“That’s where programmatic comes in. There may be buyers on the demand side who say, ‘For this particular audience, I might be willing to pay $25’ – that’s more than the publisher got by selling it directly.”

Stempeck is talking about private marketplaces, a development on programmatic’s original auctioning ethos whereby publishers can limit who bids on their inventory and for how much, creating a rule-based marketplace that, in theory, should operate in their favour.

And private marketplaces are now more common in the video world than they have even become in display advertising, says Stempeck.

On the one hand, big TV networks are traditionally more likely to continue wanting to sell their expensive ad space directly or otherwise with strict controls. On the other, programmatic technologies now let them bring viewer data to bear on ad targeting. In the middle, Stempeck is hoping to benefit from growing consumer demand for online TV and video content.

In “header bidding”, rather than publishers entertain bids from multiple bidding sources in a “waterfall” sequence, they can see them all at once, and decide on the best price quickly.

But the technology is both good and bad news, says The Trade Desk chief client officer Brian Stempeck, concluding that header bidding is a net benefit…

The duplication challenge

“It used to be that you might see one impression, one time from an SSP – (for example), The New York Times selling through Rubicon; an impression comes in.

Well, (now) The New York Times might have a header implementation with a bunch of SSPs – OpenX, Index, Google. So, in some cases, we might see the impression more than once, there’s some duplication that’s happening

“So, as a buyer, you have to be a little bit more choosy about ‘Which pipe are you buying from? Which exchange do you want to buy from?’ So, supply path optimisation is a new variable to consider.”

The price payoff

“Five years ago, programmatic was more (about) remnant inventory. Now the publisher is saying, ‘With header bidding, lets open up that whole waterfall programmatically, to let previously-remnant demand compete with my direct-sold demand.

“Some inventory that the New York Times sold directly via insertion order five years ago, we now have a chance to bid on. That’s a good thing.

The trade-off

“It’s a double-edged sword. Costs go up the more impressions you look at – but, if you’re getting better inventory to look at in the first place, we look on that as a good thing.”

The Trade Desk, a demand-side advertising platform, is working to bring more ad targeting to Roku, the connected TV box in 14 million US homes.

“Because it’s device … it’s really no different than a mobile phone or a laptop with a cookie. They can overlay audience data on top of that. You can do targeting at the Roku device level,” Brian Stempeck, chief client officer, tells Beet.TV.

“Companies like LiveRail are starting to activate that data to say, ‘Ok, this cookie that Coca-Cola has, that’s the same as this user on a Roku’ – so you can then target those users.”

This interview is part of a series of videos leading up to the DMEXCO conference in Cologne. The series is presented by 4C + Teletrax.