Advertising

Programmatic Standards Could Pave a Path to Scale

Common Guidelines and Practices Will Help Take It to the Next Level 2/08/2016 8:00 AM Eastern
Clockwise: Videa's Brett Adamczyk, FTI Consulting's Tim Hanlon and AOL's Dan Ackerman
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As programmatic TV keeps growing, standards will need to follow to help big deals to get done.

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Programmatic TV is clearly on a path to growth.

 

Borrowing tools and techniques from the world of digital while adding a few of its own, programmatic TV is starting to bring more automation to the world of buying and selling, while also providing advertisers with the kind of data needed to target the audiences they are trying to reach.

 

Programmatic models that help to surface and sell inventory are gaining traction in the TV ad ecosystem, but they still represent a small slice of the $70 billion pie. Dan Ackerman, senior vice president for One by AOL TV, put programmatic TV’s piece of the action in the “hundreds of millions.”

 

But the expansion of programmatic TV is increasingly rapid, he said, particularly when it comes to forming an ecosystem that enables agencies and marketers to rely on key data to make their ad-buying decisions.

 

RAPID GROWTH AHEAD

With that in mind, Ackerman said he sees “exponential growth” ahead. If programmatic TV is currently in the range of 3% to 5% of the total spend, it could easily rise to 5% to 7% next year, he said.

 

“Before, you had to beg people for a meeting about programmatic TV,” said Brett Adamczyk, vice president of business development and strategy at Videa, an Atlanta-based provider of TV ad-sales automation systems. “And now the phone doesn’t stop ringing with people who want to understand what we’re doing … and what it can mean for them from a workflow perspective.”

 

But it’s still an uphill battle. “TV has had these long-established guidelines on how it’s transacted. Now, you’re adding this new channel that needs to fit into the ecosystem and all of these methodologies that have been [used] for the past 40 years,” Adamczyk said.

 

“I think you could generally describe the television industry as begrudgingly accepting of the inevitability of the need for a higher-order system of transacting in a fast-changing world of increased choice and content and advertising availability,” Tim Hanlon, managing director of telecommunications, media and technology at FTI Consulting, said. “The order of magnitude of complexity of the sheer number of opportunities that are available today [represent] a mass problem.”

 

To solve that problem and get programmatic TV to the level of mass-scale phenomenon, it’s quite clear the burgeoning segment will require a firm set of technical standards and best practices.

 

Some of those will need to be established anew. Programmatic ad buying and selling models originated in the digital world, but they weren’t formed on well-established standards and guidelines.

 

“It was kind of like the Wild, Wild West,” Adamczyk said. “They started from a place of almost nothing, and kind of figured it out as they went along.”

 

Current systems aren’t equipped to handle the variability and complexity required to operationalize programmatic TV advertising, Hanlon said. And, he added, there are several facets of the industry debating and discussing how to get a grip on it, spanning broadcasters, cable networks, multichannel video programming distributors, ad-tech companies, and ad agencies.

 

With that in mind, some of the core developments forged in digital will need to transfer to the TV ecosystem. That includes the demand side of the TV ad business, supply-side elements that enable programmers, broadcasters and MVPDs to present their complex offerings to buyers, ad-inventory exchanges, and, perhaps most importantly, the data management platform that fits in the middle.

 

In Hanlon’s view, the demand and sell sides of the programmatic equation will remain relatively proprietary. “But what shouldn’t be and can’t be proprietary is that data-management piece,” he said. “Sellers and buyers need to trust this data. Both sides have to trust it for it to work.”

 

Sellers come at this using Nielsen-rated inventory, but will want to accompany that with other forms of trusted data that can help them target inventory beyond the Nielsen currency.

 

“That’s the next major theme,” Hanlon said, noting that secondary and tertiary information is starting to factor into the equation but everyone still buys based on Nielsen data.

 

Data has helped advertisers buy and target audiences in the digital world, “but when it comes to the pearly gates of television, you can’t do that yet,” Hanlon said, holding that the industry will need a trusted third party for the data-management platform piece.

 

Cable networks have doubled down on their own platforms to help advertisers bring more targeting to bear, Hanlon said, but the problem is that the insight into their audiences is proprietary. “There’s a question mark on side of ad buyers on how objective that information is.”

 

“Measurement isn’t going to get figured out anytime soon,” Adamczyk acknowledged, despite Videa having “strong partnerships” with Nielsen and Rentrak (which recently merged with comScore) alongside ongoing work integrating with station partners and with ad-tech companies that include Videology, TubeMogul, VideoAmp and The Trade Desk, among others. “It’s like putting together a 100-piece puzzle … but these are things that are starting to be worked out with standards and guidelines.”

 

AOL has also been integrating with systems, such as Imagine Communications’s Landmark traffic and billing platform for television, Ackerman said, noting that an “open API” would provide a great way to forge connections between the various companies that play in the programmatic TV advertising ecosystem and to drive true scale.

 

“But there’s been a ton of work in the past year in that area,” he said.

 

STANDARDS ARE EMERGING

Of recent note, the Television Bureau of Advertising published a programmatic-TV standards document late last year in conjunction with Pearl TV, the U.S. broadcast-TV partnership. In collaboration with TVB, several stations are on board with the Pearl TV-led task force, including Cox Media Group, E.W. Scripps, Graham Media, Hearst Television, Media General, Meredith Local Media, Raycom Media, Schurz Communications and Tegna Media.

 

That effort — the Broadcast Linear Television Programmatic Guidelines and Best Practices — aims to bring a new level of standardization for programmatic buying and selling of broadcast linear-TV advertising. In addition to the broadcast-TV partners, the guidelines are also meant to apply to other stakeholders, including ad agencies and platform providers. Those guidelines are also intended to improve compliance with initiatives from other industry organizations and forums, including the Interactive Advertising Bureau and the Media Ratings Council.

 

Version 1.0 of those guidelines covers such areas as transparency on the terms of the sale, while also encouraging the use and integration of first- and third-party data, and the use of a common set of nonproprietary APIs that can expose and update available inventory and integrate and reconcile with station workflow and traffic systems.

 

That work is a “recognition that creating their own data-management platform just doesn’t cut it [because] there’s no commonality to it,” Hanlon said.

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