Digital was just the sandbox, now the real game begins!
Ever since I became an advocate for programmatic and real-time bidding in 2011 it became clear to me that what we would be going through in the digital world would only be testing ground for the real battlefield of media…television. In many instances, while speaking about the impact and importance of programmatic and real-time bidding in digital I have always stated, as I did at the IAB Canada X-Series RTB conference in 2012, that this was just the beginning and that we would need to expand our thinking beyond digital to how this technology could make advertising more relevant across all mediums in the not so distance future. Despite the clear signs that programmatic television buying was only a matter of time, this is something that I think a lot of people have been struggling with to understand how it could become a reality. Well it shouldn’t be a struggle much longer. In 2013 I heard rumours in that someone was testing a programmatic buying platform for television buying in the US but it was a very closely guarded secret as to who it was and how it was being done, but the rumours persisted and at last the news is out.
I will say upfront that I don’t know if this is the solution that will gain mass traction, but as the article states this company has figured out what a lot of other companies including Google has been unable to do….convince those that control television inventory to release enough inventory that this becomes a real possibility. I believe this to only be the start of what I envision is going to be a major arms race for the future of the billions of dollars in television advertising. That said, this does not mean what we are doing in digital is no longer relevant but that perhaps marketers should begin looking at digital marketing as a platform for not only engaging in a two-way dialogue with consumers but also as a platform that could make all of their advertising more relevant and efficient through the use of technology.
So, who is the company that is leading the way in Programmatic Television buying…here is a synopsis of the article from Mediapost Publications.
Feature Article – Agencies Quietly Begin Using Programmatic Platform To Buy TV, Billions Already Served
In a development bound to send ripples across both Madison Avenue and the television industry, a new “audience-buying” platform has quietly rolled out an automated system enabling agencies and their trading desks to serve ads into the most premium network television inventory. Since it went live in January with a beta being used by the trading desks of at least two of the biggest agency holding companies, the new platform, dubbed AudienceXpress, has served nearly 2 billion ad impressions to network TV viewers nationwide — all below the radar of most of the TV advertising industry.
The system, a spinoff of targeted TV ad server Visible World, has managed to pull off what big players ranging from Google (Google TV Ads), Microsoft (Navic) and startups like Spotrunner (Malibu) and a host of failed dot-com era ventures, essentially failed to do: Convince a critical mass of TV industry suppliers to put enough advertising inventory into an exchange that would create enough scale for big agencies and advertisers to use it.
Because of its implications for the overall media marketplace, the rapid rise of programmatic trading in the online display advertising marketplace has been one of the most closely watched developments of the past couple of years, splitting Madison Avenue and its media supply chain into two philosophical camps: Those that want to preserve the world of old-school media-buying based on relationships, sales hype, marketing spin and person-to-person negotiations; and those who want to shift to a new world of “audience-buying” based on scientific, real-time programmatic technology enabling brands to reach the audiences — and just those audiences — they are seeking to reach with their precious ad budgets at that exact moment in time.
The secret behind that success, says Walt Horstman the long-time Visible World exec who developed and manages the AudienceXpress platform, was convincing the supply side that they were 100% in control of how, when, to whom and for how much their advertising inventory got sold.
“The inventory partners we work with are extremely sensitive,” Horstman explained in an exclusive briefing with MediaDailyNews. “If there is one thing folks in the TV business are incredibly sensitive about, it’s protecting the value of their inventory.”
In fact, it has been the fear of losing control over the value of advertising inventory that has been the major impediment to programmatic exchanges in the online business, but that hasn’t stopped the online display market, and now even highly coveted social media like Facebook’s Exchange, and even emerging mobile DSPs from developing a marketplace based on sell-side machines trading with buy-side ones. While supply was a big factor in the success of programmatic trading online, other big factors including the needs for agencies to improve their margins by utilizing technology to automate the way they buy in an increasingly fragmented media marketplace, as well as their philosophical shift from old school “media-buying” based on the seller’s inventory to the new world of “audience-buying” based on reaching the consumers — and only those consumers — that their clients’ brands want to reach with their ad messages.
It’s not clear exactly how much of Madison Avenue’s media buys are actually traded this way now. According to the most recent estimates from Interpublic’s Magna unit, programmatic buying of media currently represents about 25% of online display buys, and is growing fast. Magna predicts it will grow to 43% of online buys by 2017. Magna has not forecasted how programmatic trading will impact other media, because with the exception of social and mobile, the rest of the supply chain has been slow to adopt automated trading technology, but last week a top Magna media-buying exec, Executive Vice President Todd Gordon, told attendees at a Nielsen event produced by Beet.TV that programmatic buying would represent the vast majority of the way its agencies buy media within three years.
The big trick, says AudienceXpress’ Horstman, is ensuring that the sell-side — especially extremely inventory-sensitive suppliers like the TV industry — have control and can understand the upside of trading that way. One of the ways that AudienceXpress has done that is by giving TV suppliers complete, real-time transparency on the supply-and-demand of their inventory, including the exact pricing and yield they fetch when they put their inventory into AudienceXpress to be traded programmatically. Horstman admits that the system was designed initially to give those optics mainly to the sellers, but he says it is rapidly refining its “front-end” systems so that agencies and their trading desks can get a better view of the value of the audiences they’re looking to buy from those suppliers. He says the goal is to integrate both those front-end interfaces and the back-end trading systems to have what people in the ad tech world call a complete “end-to-end” system sometime this year.
In the meantime, that has not stopped at least two major agency trading desks from processing nearly 2 billion impressions through the system in the six months it’s been up-and-running. Horstman would not disclose the names of the agency trading desks using it, but they are known to be two of the most active and aggressive developers of programmatic trading. He also would not disclose the identities of the suppliers placing their inventory into the programmatic trading platform, but he said they are among the major cable TV operators that Visible World has integrated its target ad serving technology with, and that it is that infrastructure that is enabling the automated trading to happen.
Visible World claims it ad serving technology is integrated into systems representing about 80% of U.S. cable TV households. Based on the number of systems actually trading through AudienceXpress’ platform, it currently reaches 50 million homes, but a spokesperson said the company is “onboarding new partners each quarter.”
One reason those cable operators are moving so quickly to utilize the system is it gives them an incredibly efficient means of selling their TV advertising inventory to national advertisers in a way that does not cannibalize on the local and regional buys sold by their direct, in-house sales organizations or their reps.