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It’s Time To Tear Down the Walls: The Future of Addressable Advertising Is Interoperability

Getting good ballplayers is easy -- getting them to play together is the hard part, said legendary baseball manager Casey Stengel.         

Addressability has reached an inflection point, so it is imperative that the biggest “ballplayers” play together.  

Here is what brought the industry to these crossroads: After eight years, the local market for addressability has now matured. Satellite companies deployed the technology first, so until the last couple of years, you went to DirecTV for addressable campaigns on live television because Comcast and Charter didn’t have those capabilities. That is no longer the case.  

Distribution companies like Comcast, and until recently AT&T, snapped up programming networks. When Comcast bought NBC, they wanted the network to leverage addressability through their Freewheel division, or in AT&T’s case, WarnerMedia executed it through INVIDI.

Bruce Anderson

Guest blog author Bruce Anderson is CEO and global CTO of INVIDI Technologies. (Image credit: INVIDI Technologies)

The result? Ad salespeople can’t sell their addressable inventories across the entire country, hitting roadblocks set up by each operator's reach. Imagine the frustration for an advertiser with a national addressable campaign who has to choose: one operator with reach of 25 million homes, another operator that reaches 10 million homes, or another operator with possibly limited addressable capabilities. 

It’s like ordering a peanut butter and jelly sandwich and getting only the peanut butter or the jelly, never both.  

These aggravating limits have rippled into other areas: measurement shortcomings (since Nielsen only measures national spots), and many small unique cable channels are not receiving the fairer value for their inventory, which they normally get from addressability targeting throughout cable’s “long tail.”  

There is one solution to break free of these aggravating limits: interoperability. Networks want to be able to sell any break position in their broadcast feeds addressably across the entire distribution footprint. They want to put it into a system, turn the crank, have the impressions counted, everything rolled up, and reported back to them.  

We have to offer an ecosystem where an order and its creative enter the system once and gets distributed out — whether that order enters through INVIDI, Freewheel or some other stack — and the data gets passed among all of them. Once the execution occurs, the reporting is collected from all the distribution points, and then rolled up into a single ratings report that happens for each addressable ad break — if everyone is speaking the same language. 

Playing ball together means advertisers and programmers shouldn’t have to specify audiences at DirecTV or Comcast because they’re each using different definitions for what counts as an impression. Nobody should be forced to learn both INVIDI’s Conexus and Freewheel’s MRM system if they’re already using one of them.  

All of us must agree on a body of standards we can all support that communicates an order line between our two technologies, including a common definition for an impression. All the wires are bi-directional. You don’t have to be tied to one system that rules them all.  

Imagine buying a hose from any hardware store and knowing it will fit the spigot at your home. Adding proprietary content to a standard would be like needing a special adapter to connect the hose to your spigot. This adapter adds no value, and you can only buy it from one source, meaning there is no price and competitive pressure to improve performance. It limits unified selling. 

Think about how interoperability can lift all boats. Traditionally, an advertiser approaches CBS and says, “I want to be on FBI: Most Wanted.” Prices are negotiated for a CPM rate, Nielsen verifies that the rate is delivered, money changes hands … it’s one stop.   

Interoperability can work the exact same way. You buy a program and specify the sub-set of audiences that you want as opposed to buying the whole audience. That kind of efficiency is better for the programmer because they can monetize those additional audiences in another way. Instead of selling the whole break for a $10 CPM, you can sell it three times at a $6 or $8 CPM. The advertiser pays less, the programmer gets more money and everybody goes to bed at night knowing slices of the entire country have been reached.  

Viewers win too because ad loads can actually go down. The days of “I don’t know how much of this NBA playoff game somebody is going to watch, so I’ll run this beer ad spot 45 times in the first half to make sure I get my required three impressions” will be over. You’ll know exactly when those three impressions have run, so there is no need to bombard audiences.  

Without interoperability, Freewheel can only grow to the extent Comcast does and INVIDI can only grow as far as DirecTV and Dish do. We both end up standing on shrinking ice cubes instead of being able to pivot the whole industry together. 

The best next step is for all parties to agree to a public, non-proprietary version of addressability standards. We all need to chip in for the greater good of the industry. 

If addressability is going to fully benefit the industry and live up to its promise — being the Swiss Army knife of true national advertising — everybody has to step up to the plate and play ball. ■

Bruce Anderson is CEO and global chief technology officer of INVIDI Technologies.