Broadcast’s Battle With Big Technology

ryanjamboretz"On TV And Video" is a column exploring opportunities and challenges in programmatic TV and video.

Today’s column is written by Ryan Jamboretz, chief revenue officer at Videology.

Premium video is a huge success story, with great-quality shows and content watched and engaged with by consumers around the world.

It’s where TV and video truly converge as shows can be watched across multiple devices. Regardless of device, what remains the same is the premium nature of the experience. There is no comparison between a commercial message in premium video and one inserted into a stream of someone talking about how to do your nails on Facebook Live.

The differential is starkly exposed when assessing ROI for the various video types: Broadcast content can deliver ROI that is as much as 200% higher than longer-tail content. Broadcasters now face the daunting technology challenge of enabling audience-based delivery across multiple devices.

For the world’s largest brands, premium video is brand-safe territory. The limited nature of quality supply has ensured that CPMs remain high, even in the face of increased supply further down the tail. High ad rates have helped expand the market, with serious editorial teams from brands with a publishing heritage also producing great-quality video.

However, premium video is not the display market and it never will be. Display exchanges feed off near-infinite supply, pay little attention to context or environment and have chased prices to rock bottom.

The display exchanges were built to solve a completely different problem: delivering performance advertising solutions. Premium video is brand-driven but, despite this, the big ad tech giants are determined to push a vision of exchanges for premium video that removes the role of the broadcast sales house from the marketplace.

Broadcasters and other premium publishers now face their toughest battle, despite the fact that they have delivered exactly what advertisers have demanded for the last few decades. They now distribute their content across multiple platforms, ranging from video on demand to mobile and desktop via cable, satellite and free-to-air broadcasts.

Broadcasters are now being asked to complement the traditional model of delivering mass-market audiences, such as women 18 to 34 years old, in one brand-safe environment with a microaudience-based delivery system that is integrated across multiple channels.

Although broadcasters have perfected the art of delivering video content to mobile, tablet and laptop, they are only just embarking on the task of aligning the systems that serve in each channel. This will facilitate integrated delivery of ad messages across all platforms and devices.

The challenge is not a need for better ad-serving technology in each channel but to enable audience-based delivery across multiple devices. They must be able to control reach and frequency capping across mobile, desktop, digital out-of-home and, ultimately, broadcast TV.

Most broadcasters have moved on from seeking solutions that will enable them to auction a chunk of remnant inventory. Instead they are trying to address the more fundamental challenge of inserting a new layer that integrates each channel into a seamless offer. It’s more than simple ad serving and it requires new tools to ensure legacy systems can deliver for audience-based premium video.

If broadcasters fail to deliver this, they risk Google and Facebook finding ways to disintermediate them, taking the money and leaving them clinging to the wreckage of their business model. Google and Facebook invest billions of dollars in ad tech solutions each year.

There are also challenges for the buy side. The tech giants project a Midas-like appeal that resonates with marketers. Disintermediation is already playing out as large advertisers strike direct deals with social media and digital search businesses. Free analytics tools, visits to HQ and great parties may be appealing but are actually about encouraging the buy side to funnel money through their exchanges and to their own media properties.

Programmatic is part of the solution, but it will be one that takes scale, content appeal, context and audience into account. Premium video content, such the Premier League or the NFL, will always have more value than vloggers or live-streamers. Procter & Gamble and other players will not be satisfied if an auction mechanism diminishes their buying power to parity with their local fish and chip shop.

It doesn’t matter which country you are in. Right now, I am having broadly the same conversation with buy and sell sides in markets as diverse as Australia, Canada, Japan, France, Germany and the UK.

To keep the technology giants at bay we need to be nimble to help both sides of the space protect their right to play here. The key action that advertisers, agencies and media owners need to take is to create an understanding that ensures they can manage across channels and deliver key audiences within them.

Follow Videology (@VideologyGroup) and AdExchanger (@adexchanger) on Twitter.

 

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