Our industry’s understanding of programmatic display, mobile and video hasn’t done as much as you might think to pave teh way for programmatic TV. TV is different. While the narrative is a familiar one – i.e. we’re still talking about things like automation, data and targeting – the technologies, data sources, buying methods and market dynamics all add additional layers of complexity. Here Dan Ackerman, SVP, ONE TV at AOL Platforms, explains some of the key issues. He discusses how AOL are working with an Australian pay TV operator on programmatic TV today, whether we’ll ever see real-time bidding (RTB) for TV inventory, the entrance of multi-service operators like Comcast into ad tech, the technological barriers to programmatic TV, and what will drive the future growth of programmatic TV.
Could you provide some background on what AOL Platforms is currently bringing to the programmatic TV market?
Last year we launched our programmatic television offering, ONE by AOL: TV. Programmatic TV is about using data to change the way that television is targeted and measured, rather than real-time bidding or real-time ad insertion. Where we add incremental value is in the ability to process big data sets, from syndicated third party data such as Nielsen’s panel-based measurement and Rentrak’s return path data in the US, or helping people to activate their first party and digital data, such as CRM or web-related data. In other words, the first step in programmatic television is to use technology to onboard and understand large data sets.
The next component is to look at the entire media landscape and use automation and algorithms to predict where the highest value audience is going to be for a particular product or service. The aim is to recommend the best combination of media assets that will enable the advertiser to meet their KPIs in the most efficient way possible, whether that’s audience reach, audience composition or achieving a particular CPM.
Australia has been exceptionally progressive and fast-moving when it comes to programmatic TV. What can companies in other markets learn from what is happening there?
We are working with Multi Channel Network (MCN) on a pilot of the media industry’s first integrated programmatic private marketplace for television. This enables advertisers and agencies to perform targeted, data-driven, audience buying, and deliver real consumer-led analytics and insights for dynamic campaign optimisation.
MCN is probably one of the most progressive pay TV operators currently in business. As well as levering its own set top box data, it is accessing retail and consumer data sets via partnerships and creating audience segments that are significantly more granular and more meaningful than the traditional panel-base.
This is driven by MCN understanding that combining its own extensive set top box data with third party data from market leaders gives it the ability to create a universal view of the consumer. As a result it is setting up automated private marketplaces and buyers are beginning to buy against segments of TV. Phase two will look at video holistically so that the same segments can be bought across all devices and formats. This is the right time to do it; MCN has control of the inventory, it has the data and, working with ONE by AOL: TV, it can provide the automation that gives buyers the ability to do this in a seamless fashion.
Are there many infrastructural barriers for publishers who want to get started with programmatic TV? Do they need a specific type of set-top box (STB) for example?
There needs to be a dataset that gives the ability to target and optimise on something more granular than panel-based measurement. In the US for example, there are a lot of options, whether that’s aggregated data from Rentrak or set top box data direct from one of the TV operators.
In Australia MCN has extensive data from panels and set top boxes, as well as from third parties that show purchase behaviour. Our role is to help them use that data in an automated fashion. The aim is to make it a seamless interface for buyers so that they can use the automated platform in the same way they do digital to create campaigns, look at different audience segmentation and have complete automation and transparency.
Any pay TV operator that has a set top box has the basis for creating audience segments, which can be aligned with first party data from advertisers. Broadcasters with a true catch up TV function and TV targeting data are starting to embark on this. It’s about understanding what data is available, capturing it, and then harnessing it to better understand audiences so that it inventory can be sold to advertisers on the basis of how well it aligns with their target customer.
Will there ever be a place for RTB on TV, for example to monetise remnant, or will it always be direct buys or private marketplaces?
The move to IPTV-based platforms opens the door a little, but realistically we are several years away. Everything in television is time-based, with most broadcasters or pay TV advertisers starting their preparations 48 hours in advance of going to air. In certain environments there is currently some dynamic ad insertion, but it’s still not RTB because the creatives need to be loaded and the data matched up in advance.
It will be interesting to see how the opportunities for real-time bidding develop as smart TVs and OTT devices advance. However, there’s also an argument that there isn’t a need for RTB in television because there isn’t as much fragmentation as there is in digital. Inventory is mainly premium and, for media companies to retain the control over this that they prefer, it’s unlikely to reach the RTB realm.
We’ve seen some of the multi-service operators (MSOs) TV operators like Telstra and Comcast making moves into ad tech. Do you view companies like those – and pay TV operators in general – as potential partners, or do you think that ultimately they will want to make their own way by acquiring ad technology?
We definitely see them as partners, whether that’s for data, inventory, technology, tools, etc because we have a truly open architecture. For AOL Platforms this has been a core philosophy in terms of data, inventory, tools and platforms. We have demand-side and sell-side platforms for digital and video, with these now opening up for TV. But rather than operating in a closed system, operators can use as many or few of the elements that they need because we are integrated with most of our partners.
What will the post-programmatic TV landscape look like and how will it differ from what we have today?
A key development will be collaboration amongst the legacy systems. This will lead to more progressive product development to give customers the ability to trade in different environments, whether that is exchange-based or through providing the automation that enables interaction with buy-side systems such as those being developed by AOL Platforms.
In the next two years there will also be significant movement towards developing APIs – web services to integrate systems. From there we will see the alignment of data, because being able to connect audiences across digital and linear environments drives big advertising spend. Increased understanding of how consumers are reacting to advertising across the various different devices and formats helps advertisers keep pace with consumer change, and will drive investment.
This is a key focus for ONE by AOL, in recognition that being able to manage audience segmentation and also understand how consumers are reacting to advertising across mobile, tablet, desktop and connected TV will be the two big trends that will emerge in the next two years.
Attribution will also continue to grow in significance as understanding outcomes and ROI in a more automated fashion and how that impacts the planning and optimisation of media becomes increasingly important.