The Different Paths to Profitable Multichannel Ad Sales

"When every media company is dealing with the same problem, it can be easy to think that every company should be considering the same solution, but that’s far from the case." -Lorne Brown, CEO, Operative

Ask a room full of broadcasters if they have the infrastructure to succeed in a multichannel, audience-targeted future, and I doubt a single hand would go up. In fact, several discussions at NAB were focused on the archaic infrastructure across the buy and sell side of linear advertising. Nearly every linear agency and broadcaster suffers from outdated systems, manual trafficking processes and custom-tailored sales practices.

Brian Lawler, president of local media for E.W. Scripps explained that today, most broadcasters are simply focused on automating the paper and fax-driven processes of spot buying, let alone advancements in programmatic buying.

When every media company is dealing with the same problem, it can be easy to think that every company should be considering the same solution, but that’s far from the case. Every broadcaster might be yearning for a “premium” version of Facebook and Google - they have automated media buying, audience targeting at scale, and real time insights that go much deeper than typical Nielsen data. But, every media company can’t realistically create their own highly-scaled walled garden that draws in direct demand from thousands of media buyers.

To make things more complicated, the four major media buying groups all want their own version of processes, proposals and reports, and the industry has not set any standards. The last thing broadcasters should do is sit and wait. Now is the time to move on coordinated initiatives that make the most of each broadcaster’s assets.

Think Like a Team Player

The path to succeeding in a transition to programmatic, and ultimately multichannel ad sales is different for every broadcaster. The one thing that is common is that broadcasters must start working together on that strategy now, rather than wait for a standard to be handed down from buyers or a body like Nielsen. If broadcasters create momentum of their own, buyers will follow.

Big national broadcasters like those leading OpenAP are creating marketplaces that promise audience scale, but buyers aren’t going to participate in 200 or 500 different marketplaces. Instead, there are going to be more market members than there are market makers. As a result, smaller, local and specialized broadcasters must determine what specific initiatives they want to participate in and how they want to partner in order to sell profitably. This will determine what resources the invest in and what technologies they change, and their resource and technology planning should realistically support these plans.

In some cases, broadcasters will need solutions that pool their inventory into a single product catalogue, or connect it with other similar premium media companies. In others, they will need audience targeting solutions that help connect audiences across channels like OTT, Advanced TV and VOD. While some broadcasters might consider programmatic solutions for most of their media sales, others will want to retain direct negotiations, but consolidate proposals to streamline the process.

Work with What You Have, Be Honest About What You Need

Every broadcaster has some combination of scale, audience, content, and resources, and that unique combination dictates what your current infrastructure looks like and how you build your strategy around your future place in the market

The shifting TV ad market can lead your company to chase too many different strategies and stretch resources to create solutions that don’t fit your true size and potential contribution to a media buy. Media buyers want access to your audiences and content, but not if it’s too difficult. Now’s the time to figure out the best strategy for ensuring a win-win without entirely disrupting our current setup.

· Open up legacy tech stacks to remain in control of the sales and delivery process.It might simply be too painful to rip out a lot of legacy linear advertising technology and start over, but that doesn’t mean you can’t open it up. Focus on freeing up whatever valuable information needs to be shared across systems to retain a clear view of your campaign delivery, content availability, audience and yield. For example, by merging delivery information from a video ad server.

· Build bridges across legacy technology to ensure inclusion in marketplace deals.Broadcasters are going to need to share a lot more with each other than they ever have before. To create scale, they’ll need access to each other’s product catalogue, inventory availability, audiences, and pricing, at various levels of transparency and reporting. Creating broadcaster standards and common APIs will help expand and solidify early marketplace ventures.

· Build all new tech on a modern backbone for new ventures. Including the elements that make a new system flexible, like single sign on and cloud-based software will ensure that you don’t get pulled too far down by legacy systems.

Rather than wait for standards to emerge that will create more cohesive automated spot buying or tie it together with programmatic, broadcasters should be taking thoughtful steps to start building up and out to accommodate the demand from buyers that is already flowing in. By being honest about their place in the market, rather than fixated on the headline grabbers of today, broadcasters can minimize disruption while creating a streamlined, open framework for a broad variety of future sales options.

Lorne Brown is the CEO of Operative. Operative is the preferred multichannel management solution for more than 300 of the world’s top media brands.