For instance, if marketers want to target A&E programmatically, they might buy A&E inventory from local cable providers until they have amassed enough impressions to represent national delivery.
“Most of the buys being placed now are done with third-party aggregators,” she said. “There’s no way to actually place a bid on a local basis. They may be bidding against each other in some very top-line way, but there’s no way to compare the actual inventory that’s being aggregated until you’ve actually purchased it. Even then, there might not be full disclosure.”
The problem national advertisers have when buying local is that there are around 3,000 stations that must be managed, Ferreira said. Other problems beyond that fragmentation center around billing complications and delivering creative.
WO Programmatic TV has two new features. Seller is an interface that lets broadcasters make inventory available and accept or reject a bid based on marketplace demand. Spot Bank facilitates creative placement and reviewing for the buy side, and it has transcoding and approval tools for the sell side. Once an ad transaction is approved, Spot Bank sends the ad directly to a broadcaster’s traffic system.
Ferreira declined to comment on which broadcasters will be first out of the gate to transact in the marketplace, though he said WideOrbit has a “significant footprint” of sellers at stations using the trafficking systems. On the buy side, WideOrbit’s clients will be video DSPs, and though he declined to name which ones, he said WideOrbit is “tentatively going after a large video DSP. There aren’t too many of those.”
TubeMogul already has hooks into WideOrbit as an exclusive buy-side tech partner.
The inventory transacted in the exchange won’t follow the same pricing patterns as in digital, and there won’t be limits on the quantity of inventory sold.
“We don’t require carve-outs,” Ferreira said. “Buyers can extend offers for the entire roster for a given station on a given day. Sellers can peruse this demand and decide which offers to accept or not to accept.”
“This is not the waterfall model we have in digital,” he added. “We learned in digital that to do holistic yield optimization, you have to have direct and programmatic in the same marketplace.”
In so doing, WideOrbit hopes to avoid mirroring the early days of online programmatic ad buying, when most of the inventory was remnant.
Ferreira expects that the amount of inventory in WideOrbit’s new marketplace will grow by the end of the year, though he couldn’t say by how much. In terms of volume, WideOrbit’s software manages more than $30 billion in ad spend each year.
But as the industry sees more of these types of marketplaces emerge, many argue that addressable TV is still a long way off.
A key requirement for the future success of programmatic television, according to Ferreira, goes back to holistic yield optimization.
“Your programmatic partners need to be tightly integrated with your first-party ad server,” he said. “In the cable space, the programmatic provider would ideally be integrated into, say, a Time Warner Cable.”
But the challenge is reach, he added. For addressable programmatic TV to be successful on a national level, there needs to be tight integration between programmatic vendors and local cable providers.