Programmatic advertising the weapon for TV networks to fight Google?
  • 4
    Apr

Programmatic advertising the weapon for TV networks to fight Google?

Advertising to somebody who is more likely to buy a particular product seems like a no-brainer.

The problem historically for television, which still remains the dominant medium – with 88 per cent of video viewing still done on a TV set – is that digital behemoths, led by Google, which owns YouTube, and Facebook, have been perceived to be more expert at that targeted advertising, which has helped them take eyeballs and advertising revenue from the networks.
The technology giants have had a running start because of their ability to capture details about people’s online usage and behaviour, which has allowed them to target consumers in a more precise way, which linear TV, despite its mass reach, hasn’t been able to do.
They’ve also been free of the burden of creating much of the content they thrive on, instead getting it free from traditional media players looking to take advantage of Facebook and Google’s scale.
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But broadcasters and publishers aren’t standing still and are moving more of their premium video content online in an effort to make up lost ground by selling advertising through the same “programmatic” approach.
Programmatic advertising allows for the automatic buying of advertising through algorithms that allow agencies and advertisers to target specific types of consumers and shift advertising around automatically based on how the campaign is running. For an instance, an advertiser such as BMW could specifically target not just an age group, but consumers who may be looking for a new car and have a high income.
Around half of all digital video was bought “programatically” in 2015 in Australia, according to AOL, which forecasts that to rise to 58 per cent this year (much higher that the US where it only accounted for a third of digital video advertising bought last year).
“Right now, given the strength of some of the digital powerhouses, Facebook and Google, programmatic makes television more relevant today than ever before,” says Mark Frain, chief sales and marketing officer for Foxtel-controlled Multi-Channel Network (MCN). “It makes it more powerful because you’re starting to add digital metrics in terms of targeting and also dynamic deliver to television. Linear television wasn’t in that conversation. Now it is.” .

Free-to-air digital platforms
Free-to-air networks are launching digital platforms, streaming their content across different devices to make sure they capture audiences anywhere and collecting the data so that they can use it for more targeted advertising.
MCN, which now sells advertising for Network Ten as well as Foxtel as part of the free-to-air broadcaster’s sale of an equity stake to Foxtel last year, is widely seen as the market leader.
According to Maxus chief executive and former Fiat Chrysler Automobiles chief marketing officer Mark McCraith, the programmatic approach allows agencies to spend more time focusing on different ways to make the most of a campaign after taking out the manual work in buying specific time slots.
“When I was at Chrysler, a booking [through MCN] took five days to process. Instead it now takes 30 minutes, which means the agency can think of other ways to innovate and do other parts of our sponsorship,” Mr McCraith said.
But M&C Saatchi director of digital strategy Michael Sinclair stresses that the market is very much in its infancy, despite many interesting opportunities in programmatic advertising.
“There is confusion about exactly what programmatic is and what value it can add for clients. We’re getting more and more sophisticated. Video remains a true unknown, it can take a long period of time to reach the audience you need to reach through programmatic.”
Mr Sinclair believes traditional media rivals will need to co-operate with each other to get the best outcome for their own sakes. “The reality is the free-to-air broadcasters here are probably going to have to work together to offer that broad audience split – it’s a question of whether they want to.”

Seven and Nine
The highest-rating networks, Seven, which is working with TubeMogul, and Nine, are expanding their own, less-developed programmatic advertising trading platforms to sell their digital video inventory.
Ratings data from OzTam now include video on the network’s digital catch-up services and the networks themselves are streaming channels live over the web.
“Once we are able to fuse that data from the offline environment and then connect that up with the online environment, that’s how broadcast television is going to play a very important part in that connectivity across screens,” Seven West Media chief revenue officer Kurt Burnette said.
“Around Home & Away, My Kitchen Rules, First Date, The Seven Year Switch, you know the behaviour in an AVOD [advertisement supported video on-demand] environment and you can correlate that back to a linear one, and all of that can be connected with a push of a button in the sense that you know who you want to target, if you know the message you want to get to them and if you want to change that message rapidly, that’s where programmatic comes in.”
Partnering with AOL, MCN launched its programmatic TV platform last year.
“It was a big move for them, because they were really changing the fixed spot model that the Australian TV market had worked on,” AOL Platforms global head of programmatic Dan Ackerman told Fairfax Media.
“There was education that had to happen but by mid-summer we had virtually full market adoption. Four of the six agency trading holding companies were actively trading on the platform, the leading independent agency where in the market was trading on the platform.”

Rise in premium video inventory
AOL is now looking to replicate the MCN model in the United States; Mr Ackerman said he is expecting there to be a significant rise in premium video inventory going online this year.
He said in the United States there was only been a small decrease in the amount of linear television consumers are watching, but overall video viewing has increased by 30 minutes.
“Advertisers want to buy video. Where they can find good video and good audience data around it, they’ll absolutely invest money.”
And this is certainly the point that Australia’s broadcasters stress when selling their any-time-on-any-device strategy to media buyers.
MCN, which is owned by Foxtel, Fox Sports and Network Ten, has been able to integrate linear television and online video thanks to 220,000 Foxtel set-top boxes it is collecting data from – it hopes to hit half a million in the next 18 months.
MCN is also combining that with Quantium’s data from Woolworths’ Everyday Rewards cards and National Australia Bank credit and debit cards.
Tellingly, Facebook is also now using data from Quantium, a data analytics firm 50 per cent owned by Woolworths.
Mr Frain said he expects programmatic advertising to continue to grow, but said it could grow faster if the industry works together.
“You’ve almost got to be a bit agnostic in terms of the technology suppliers you use, because in some regards that becomes a barrier to entry if you’ve got a preferred relationship with one platform yet another network is using a different supplier and sometimes that conversation can stop,” he said.
“I still think it will grow exponentially in the next couple of years, but it could grow faster in overall volume terms if there was more alignment from a systems perspective at the industry level.”
Source: http://www.smh.com.au/