Tag Archives: programmatic TV buying

The Battle Over The Pipeline

No, not the Keystone Pipeline, but the pipeline delivering content into US homes. Yesterday the FCC proposed a framework (whatever that means) for providing innovators, app developers and device manufacturers the information they need to develop new technologies. A link to the FCC’s statement on this is here: http://transition.fcc.gov/Daily_Releases/Daily_Business/2016/db0127/DOC-337449A1.pdf

So who is for and who is against?

No surprise, cable companies are against this because it does something they hate most, it creates competition for accessing TV programming. It also removes an important revenue stream—renting boxes to subscribers, generating billions to their coffers.

Basically everyone else in the world supports this. Imagine people having their own boxes (think Roku, AppleTV, Google Fiber) and deciding what programming they want through their cable company and what programming they want direct.

Another benefit for consumers will be the ease to transition from Cable TV to SVOD to YouTube, etc on your TV monitor. My favorite part might be a single remote instead of three. The question that remains is whether this will eventually reduce costs or increase costs. People are willing to pay for multiple services and convenience, so it could go either way.

Video content providers will see a boon and direct access to subscribers without having to be held captive to cable company’s demands and idiosyncrasies. With millions of options for video content people will curate their own personal networks. We will likely see even more short-form content with fewer ads as either pre-roll or in-stream with more real time ad insertion and addressability.

In the words of the French poet Paul Valery, “The future isn’t what it used to be”.

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The Model Isn’t Broken. It’s Fixed.

Sony, VW, P&G, J&J, Bacardi, SC Johnson, Visa, 21st Century Fox, L’Oreal, Coca Cola, BMW, BASF. What do all these companies have in common? They all have placed their media business in review, or recently completed a review. Their incumbent media agencies; the usual suspects—OMD, Zenith, UM, Mediacom, Vizeum, Carat, Starcom/MediaVest. The agencies involved in the review; the usual suspects.

Insanity is doing the same thing over and over again and expecting a different result.

I’ve heard and read that some people believe that industry change (content, integration, analytics) is driving this rash of reviews. If so, why are the same agencies that some clients are dissatisfied with all of a sudden appealing to others? Why would OMD be a good repository for Bacardi, which they recently won, when current clients J&J and Visa have put their accounts in review? Is it because what is shown in new business pitches is not what is used on a daily basis? I witnessed much of this when I was at Initiative, albeit a dozen years ago. The people who work on client business think many of the tools and sexy stuff shown in new business pitches is just that, only shown in new business pitches. It’s not practical for everyday use because the planners have too many boxes of GRP’s to fill in. They do not have the time to solve real business problems.

So what is the value proposition of these mega-media agencies? It certainly isn’t buying leverage because smaller agencies can match the big guys on media pricing—and often beat them. The big guys speak of relationships with the media companies, but the media companies are putting more and more inventory up for sale in the open market, using exchanges to eliminate the human aspect of transactions that is rife with inefficiencies.

Others suggest that the reviews are procurement driven, which explains why only the usual list of invitees are participating. These big agencies hate losing business and they’ll promise everything to win. They have a beast to feed to perpetuate their own myth and they believe their own BS.

You don’t have to. If you want the same-old solutions join in the Mad Hatter’s Tea Party. If you want real change you really have to want to change.

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Is The Addressor More Important Than The Addressee?

This is an important topic to discuss in the new age of programmatic buying, especially as it starts to creep out into traditional media. The historical method of advertising is interrupting content to present your message to the entire audience of a media vehicle (magazine, TV show, radio show). Okay, you could sometimes buy partial audiences based on geography or, in the case of print, extra content added for special audiences, but we were trained as media professionals to negotiate with media sellers to place our ads to a content seller’s entire audience based on that audience’s value as compared to the next seller’s audience.

Last week we met with a cable system operator who is starting to offer real addressability of their television audience based on HH data and set-top-box identity. I was thrilled because for many clients the HH is the buying unit and I’d rather message an accumulation of particular HH’s based on proclivity than a program’s audience—the former has to be more predictive to success than the latter.

That’s when our discussion got interesting. Does it matter what TV program an ad runs in or is the aggregate of addressable prospects more valuable? Some argue no because they were trained to evaluate and buy programs. But these days we’re dealing with new realities that don’t require us to buy total audiences. We have the data and the technology that enable us to deliver ads to individuals and therefore, in most cases, the venue is irrelevant. Much like most programmatic buys for online media, addressable TV frees us from investing large sums directly with content providers and now the distributor of that content, the cable operator, not the network or the syndicator is who we should be placing media buys with.

So what becomes critical with addressable TV? How about bad content. Huh? “That makes no sense”, you say. But if I want people to take action from an ad on TV I want my ad to be in content people are willing to abandon. That’s right and that’s what DR marketers have known for a long time.

Here’s where it gets even more interesting. Cable operators are selling ads to local businesses and DR marketers. Adding addressability to their quiver means national marketers with unique needs become a viable source to sell ads to. By creating an additional customer base the demand for their inventory increases, thus raising the bar for pricing on their inventory, creating another tier of ad pricing. Smart move cable operator. Extract more value from your current base and add an entirely new customer base. I’m buying.

What about you?

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Automation Infatuation

I’m a big process, math and science guy yet I am not one to fall head over heels for programmatic buying. Last week IPG announced they would be using an automation platform for buying video inventory not just for web-distributed video but for traditional TV outlets as well. They’ve set up deals with multiple networks, local station operators and cable operators. IPG’s goal is to automate up to half of its media buying by 2016. Media Post had a quote by Tim Spengler, Magna Global CEO who said that their “goal is to ignite real change in the way media is transacted for the industry.”

 http://www.mediapost.com/publications/article/207108/interpublic-strikes-deals-to-automate-buys-with-5.html?edition=63600#axzz2cVuTF8FJ

 That’s a great goal for a media buying agency. Not. I see no mention of client benefits and, in fact, the article suggests that clients could be harmed because programmatic buying isn’t an auction or a way to drive media prices down. It’s a way for sellers to set a floor price at which they will not go below. While it also enables agencies to set price ceilings the only thing it accomplishes is allowing the agency to better predict the pricing by reducing the range of pricing paid. It also removes most, if not all, of the human and qualitative factors from the show selection process. Some TV shows are better than others at adding value to a marketer’s commercial—I’ve got case studies to prove this. Robots and computers cannot discern that from the numbers they are analyzing. Some shows are highly marketable to the trade based on name alone for purposes of getting higher quality merchandising in-store. In true Real Time Bidding situations a client cannot tell the retailers in advance what programs are going to be on a buy

There are some positive aspects of these developments. Incorporating more than Nielsen audience data is in my opinion the biggest benefit.  I’m sure access to data from set-top-boxes and over-the-top boxes are part of the agreements between the cable operators and IPG, or at least I hope it is. Combining this with shopper loyalty card data on product purchases can be beneficial IF the agency is driving to the proper metric.

Programmatic buying doesn’t help an agency make better decisions for its clients as much as it helps an agency make better decisions for itself because the agency can manage more work with fewer people. It helps the sellers because they will have even more control over pricing—most notably their worst inventory–and it harms clients IF they are not using the right metrics to select programs.

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