As other video ad firms lay the groundwork for programmatic online video, Harris Broadcast is working with Placemedia to administer exchange-based sales for TV spots first. Then, maybe they'll take on online video.
After nearly a year of collaboration, Placemedia, which has deals with broadcast stations, cable operators and satellite providers covering 50 million households, has put the finishing touches on its ad exchange with hardware and software workflow specialist Harris Broadcast. The pitch to traditional broadcasters is that by using their system, advertisers can easily purchase and add unsold inventory to their schedules.
"Everyone is trying to solve the problems of the fragmented media landscape," said Derek Mattsson, president of Placemedia. "As an ad network focused on TV providers, we're not looking to connect TV to web video directly. Eventually, we expect to do that. But right now, 97% of the viewing is done on TV, not the web. So why not start by cracking the programmatic code with TV?"
In a sense, Placemedia is picking up where Google TV Ads left off last year. For about five years, Google tried to get TV networks and pay-TV companies to adopt its system that sought to make the self-serve AdWords model available for broadcast, cable and satellite. At first it seemed like the search giant just might revolutionize TV media buying when NBC Universal signed on with the promise of a huge amount of unsold inventory. But after a year of consideration, NBCU withdrew from the plan and no other major TV networks gave it a thought. Though Google struck limited deals with Cox Media in 2012, it was already too little too late and Google decided to turn its attention back to developing an ad strategy for YouTube.
For its part, Harris picked up a mantle worn by web-based TV analytics provider Spot Runner, which created a local cable TV media buying software called Malibu in 2009. The Malibu sales platform was meant to complement Spot Runner’s customizable cable TV commercials, which are mostly aimed at local businesses. But a lawsuit from investor WPP Group distracted the company at the time of the launch and, like Google TV Ads, Malibu was deemed a little ahead of its time. In 2011, Harris bought Malibu as a way to enhance its existing workflow tools for broadcasters.
Whether TV companies are more open to programmatic now than they were two years ago remains to be seen.
Harris and Placemedia are selling TV ad inventory on an impression-based model, as opposed to relying on traditional broadcast methods like gross ratings point negotiations. Interestingly, most video ad tech companies boast of their use of GRPs as an audience metric, since they want to speak to TV buyers in a language they understand. For their TV exchange, Harris and Placemedia have flipped that idea on its head.
"The value of what we're selling is that it will be as targetable as online, so it makes sense to sell advertising on TV in the same language as web-based exchanges," said Scott Criley, director of media and workflow at Harris. "There's a lot of available inventory out there and a lot of online video advertisers want to do the same thing on TV as they do on the web. In order to move those dollars, it makes sense to do business in a way they understand."