TOBY GABRINER: They certainly bring a strong capability in onboarding third party and first party data for doing much more granular and interesting targeting within the linear television space. They also bring a really strong technology platform that allows for the ability to do intuitive and non-intuitive planning. So you’d put in the audience you’re trying to go after and you can do much deeper audience segmentation analysis beyond just age and gender. What their technology can do is actually identify networks and programs that you wouldn’t necessarily think of as being intuitive – and then the system can learn and optimize that.
Can you give an example?
Let’s say we’re trying to reach mothers age 25-44 with household income of $100,000. You’d input that into the PrecisionDemand (and now the Adap.tv) interface and you’ll get a starting media plan that will have programming you intuitively think could reach that audience. But then there will be a whole bunch of different programs you may not [expect] that actually happen to index high across that particular audience. As the campaign runs, the system gets smarter about allocation on a go-forward.
So, predictive TV targeting.
It’s very powerful and parallel to what we’ve been doing with digital video for some time. You can start to see how you can connect the dots between video and television. It becomes even more powerful when you add the Convertro piece on the back end, which allows us to better understand how television, video – if there’s display running on that – how the different media channels are operating in terms of ROI, both singularly and collectively. We can start to make real-time optimization happen as a result of that.
Are there concerns about Convertro’s objectivity since AOL both runs the media campaign and measures it too?
It’s something we’re quite cognizant of. But our entire technology stack – Adap.tv, ONE by AOL and obviously Convertro – is inventory-agnostic. If you’re an Adap.tv customer, you don’t have to buy a single impression from AOL. We are simply providing you software to allow you to manage your media business. If you choose to purchase inventory from AOL, that’s great but it is by no means a requirement and it’s not favored in our system or anything of that nature. AOL Platforms will increasingly be viewed as an agnostic provider of technology and obviously Convertro fits right into that. Certainly it can measure and provide insight on AOL inventory, but there’s no preferential treatment at all.
What has the customer response been?
We had one customer who asked the question about neutrality, but we’ve seen actually an acceleration of interest across the board (in Convertro) and I think by and large, we’ve done a pretty good job in the field alerting customers that we really have two sides to our business – there’s the media business and the technology business. We’ve been delivering on that sufficiently. There is a separation of church and state. I think [Convertro] was a really critical acquisition for us with the division of ONE being a multichannel platform. You’ve got to have multi-touch attribution to be the brain behind all of that.
How is the ONE platform coming along?
It’s being built as an open platform. We may have customers that only want to use us for their video business or their display business. They may have a DMP (data-management platform) they want us to plug in or already have a multi-touch attribution partner they want to plug in. We do not believe it’s feasible nor do we want to have a closed ecosystem. Part of our focus over the next 12-18 months is to onboard customers, whether it be for their video and television needs or they’re just using Convertro on its own.
How will PrecisionDemand, full of set-top box data, work with your DSP add-on, Audience Path for TV?
A media buyer can buy both digital video and television through the Audience Path product. It’s that piece that allows for the initial planning and brings linear TV optimization capability in. It was something that was on our product roadmap and by bringing PrecisionDemand into the fold, it essentially accelerated something we had already planned on building out.
We’re seeing an intense amount of interest – certainly from agencies and advertisers who want to apply the data they’ve been collecting and leverage that in much smarter ways in the television channel. Audience Path for TV enables that on the buy side. We’re starting to see some of the sell side expressing an openness to transact in that manner as well.
How advanced is addressable in linear TV?
Programmatic in the digital space started out on the edges, whether it be remnant or long tail inventory, and eventually made it into the ABCs, NBCs and major publishers. If you look at display, there’s not a big publisher brand that doesn’t use programmatic in some way. In video, we started to see a similar trend. Over the last year or year and a half, you’ve seen major or big brand name publishers start to make their inventory available in programmatic direct or even sometimes in exchanges themselves. In television, I think it’s similar. You’ve got the satellite operators and some of the mid-tier broadcasters who may have excess inventory, and it’s good inventory, by the way. And they’re willing to make it available in more of a programmatic manner – so there’s more flexible, fluid terms.
Is real-time linear ad insertion happening?
Linear is not the same as digital in that you can’t do real-time dynamic ad insertion. You can do near real time and start to apply data and move in and out of inventory positions, which is a lot more efficient than the way it is done today.
We’re all waiting for addressable to become a bigger footprint and then I think you’d start to see television look more like digital. I think you’ll see it out on the edges first and then the bigger names will start to come onboard. Is it going to replace the upfronts? Absolutely not. But there’s a lot of television inventory out there and intense interest to start leveraging data and I think eventually that pressure will lead to real change in how media is bought and sold in television.
Let’s talk about programmatic direct. GroupM made a splash this week when it divorced itself from the open exchanges.
This is a really important signal and one that those of us who have been in the programmatic space for quite some time are excited about. I think it’s a signal that agencies want to increasingly leverage automation and tools to connect in to inventory. The old way of buying and selling is really not working for them and I think part of the signal is saying, we don’t just want to buy long tail inventory in this manner in a programmatic way. We want to be able to buy premium inventory as well.
It’s important to note that the way in which the transactions occur may be very different than in a public exchange – there may be different kinds of commercial arrangements – different kinds of data arrangements and things of that nature. It’s really now leveraging machines where machines are good and allowing humans to be more focused on the creative and strategic elements. If you look at the way agencies are structured, they have an overwhelming number of people that are focused on just sort of operational overhead that doesn’t necessarily provide the kind of value that those people were focused on their clients’ business. Those dollars will be much better spent.
Are you cutting more programmatic direct deals with the Adap.tv, FreeWheel and Mediaocean FourFronts initiative?
It’s still early days and we have a limited set of initial partners we’re working with here. The first step was to provide the kinds of tools that give publishers comfort moving in to different commercial arrangements within the programmatic arena. Assuming these go well, I think we’ll start to open it up more and more. There’s certainly a lot of interest on the buy side, but I think the sellers all want to make sure they’ve got the kind of protective frameworks in place for them to be able to go forward.