TV COMPANIES SEE GOING PRIVATE as the best way to embrace the wave of programmatic ad buying.
By using private exchanges that make advertising inventory available only to preferred buyers, TV companies are better able to control pricing and which ad runs adjacent to their valuable content. For advertisers, private exchanges provide more predictability and reliability, and increase the chance that ads bought via automation can actually be seen by consumers.
“We’ve been very vocal about moving to private marketplaces where we can have the controls in place to make sure clients are actually getting what they’re paying for,” says Rino Scanzoni, chief negotiating officer at GroupM.
Programmatic remains a confusing buzzword in the TV business. It boils down to two characteristics. The first is using data to match a marketer’s target with the audience for a particular piece of content. The way that process makes marketing more effective, and appropriate inventory more valuable, is already overwhelmingly being adopted by both buyers and sellers of TV advertising.
“I would say probably half of what we spend in TV is tied to looking at other data,” says Scanzoni.
The second aspect, that commercials, particularly during online and mobile viewing of shows, can be bought and sold automatically and efficiently by computers, is still subject to debate.
Different media companies are further along in feeling out their approach to programmatic. Some are testing. Some are talking.
NBCUniversal this fall launched its NBCUx program and said its full portfolio of digital display, digital video and mobile content would be available programmatically to selected clients. NBCU says clients who have jumped into its programmatic pool are spending 20% of their dollars that way.
“We are working with our best clients to determine what the most relevant and meaningful ways are of executing programmatic media campaigns,” says Krishan Bhatia, executive VP, digital strategy and operations, advertising sales, at NBCUniversal. “This is not a giant machine that everyone just plugs into…it still requires intelligent dialogue with clients and agency partners on how we can add value and help them accomplish their media objectives in a more meaningful way.”
What’s in it for NBC? “The way we look at it is: how can we grow the efficacy of media budgets that our clients are deploying and therefore, how can we grow our relationship and our spend and share with those advertisers?” Bhatia says.
Understanding the Value
Content owners have concerns about programmatic buying because in the digital display world, it has pushed prices down. The world of high-quality video is different because of tighter supply. and with content more closely matching advertiser audience and contextual targets, it should be more valuable to advertisers. “We believe so and we’re seeing that in terms of the business we’re transacting with clients,” Bhatia says.
Vincent Paolozzi, VP, marketplace development and investment at Magna Global, says programmatic buying is raising the price of premium video content above what clients are paying for TV time, on a cost-per-thousand, or CPM, basis.
Magna is among buyers testing the programmatic system aBC announced at its upfront in May. “The challenges are more in the piping and putting it together,” Paolozzi says, but there have been rewards. “We’ve been able to take customized audiences that we’re developing through our own data management platform system and are able to pass them through to FreeWheel and aBC and actually get a true forecast of how much of that inventory was can actually reach,” he says. “You can even buy programmatic inventory in a guaranteed way against a guaranteed set price and a guaranteed impression delivery as well.”
Mike Dean, who joined aBC as VP of programmatic and data driven sales in July, says the test was to establish that the system worked.
“It’s to understand the process, the technology, and then frankly where things would break down in this back and forth,” Dean says. Campaigns were supposed to wrap up in September, but delays pushed them back into November. “The aBC trial wasn’t designed to measure how attractive programmatic would be to marketers or how effective the campaigns were, just that the data came in and the right ads ran. Nevertheless, Dean says, “we’ve learned a tremendous amount and that’s going to put us in a much better position for phase 2 if there is one, or for whatever the evolution of our data-enabled video strategy will look like because we have a good sense now for how to speak to our clients, how to speak to all of the technology vendors that are participating in the process.”
What’s next? “I don’t have a crystal ball but I do think that the fundamental value of marrying content and context with audience data and targeting is something that is here to stay,” says NBCU’s Bhatia. “In the television infrastructure today, for the most part that is not a reality yet. But if and when technology does enable that, I think that that same dynamic will benefit the television medium just like it is now on digital platforms.”
Magna has set a goal of doing half of its buying via programmatic techniques by next year. Paolozzi says the agency is on track. “It’s exciting to be in the forefront of where we’re heading and where we think technology and data can drive the media,” he says.
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Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.