Commentary

Videology's Scott Ferber: 2017 Is The Year for Programmatic TV Advertising

Scott Ferber is the hyper-kinetic chairman and CEO of Videology, a B2B ad tech platform that focuses on premium programmatic inventory. RTBlog recently spoke with Ferber   a self-described “math guy”   about industry trends and what’s coming down the pike. Ferber says:

2016 will be a big year for linear TV demand.

Why? “With the U.S. presidential election and the Rio 2016 Olympics, linear television is likely to be tight next year, despite shifts in consumption habits. From the broadcaster and pay TV providers’ perspective, the need to move quickly on delivering audience-based solutions may be somewhat mitigated by the expected scarcity in the marketplace.  However, consumer viewing habits across screens will continue to evolve, thereby fueling marketers’ interest in cross-screen, data-driven and audience-based buying solutions.”

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Now here’s a bold prediction: Ferber bets thatt 2017 will be the year that big dollars begin to flow to data-fueled, audience-based, automated TV advertising. 

“The 2016/2017 TV upfront will mark the start of serious discussions about audience-based TV buying. The result will be a year filled with advanced TV testing and a ramping up of technology infrastructure to prepare for future shifts toward programmatic solutions of various forms. All of this will set the stage for real dollar movement in the 2017/2018 upfront.”

Whether you love ‘em or hate ‘em, the TV upfronts and video NewFronts will continue to thrive.Why?

“As we move toward audience-based buying and multiscreen convergence, the continued relevance of a TV upfront and the necessity of the video NewFront is often questioned.  However, the number of media companies participating in the NewFronts continues to grow.  This speaks to the fact that certainty  i.e., that ability to buy fixed cost fixed volume inventory still matters. 

"It’s becoming clear that RTB isn’t the answer for constrained, scarce markets like premium TV or video inventory.  Think about it. Macy’s can’t find out on Saturday that its campaign under-delivered for Friday’s one-day sale. There’s a premium to certainty  and that’s what both the upfronts and NewFronts offer advertisers.”

First-party data will become more actionable — and more valuable. 

Advertisers sit on mounds of first-party data that could do more to drive business outcomes than any third-party data ever could.  But many have been reluctant to activate this data for a variety of reasons, including technology constraints and concerns over security. 

"Now, as solutions for using first-party data evolve, more advertisers will begin to activate their data in 2016.  As a result, advertisers will become more educated and involved with technology decisions, both directly and through their agencies, in order to ensure that their data is protected.”

Mobile will be the next distribution channel for linear TV.  

Mobile is already the central connection point for most consumers, and its strength will keep on growing as it becomes another distribution channel for live, linear TV.With the ubiquity of 4G across the U.S., the ‘pipes’ into the home  once controlled primarily by cable and satellite providers  can now sit on the smartphone.  Content can then be streamed to the big screen or other devices. This will redefine and evolve existing pay TV providers’ business models.”

A growing interest in media-mix allocation will fuel greater consolidation of the tech stack. 

Fragmentation of viewing across screens is the new reality.  In order to reach consumers at scale, advertisers need to begin thinking in terms of cross-screen models.  And for those that do, the resulting outcomes — including sales lift — are substantial.  But the deployment of multiplatform campaigns can only happen if siloed technologies and data converge.  Look for more consolidation between technology companies in the coming year, and an uptick in converged cross-screen advertising solutions.”

11 comments about "Videology's Scott Ferber: 2017 Is The Year for Programmatic TV Advertising".
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  1. Ed Papazian from Media Dynamics Inc, December 10, 2015 at 9:41 a.m.

    Scott's prediction that 2017 will be the year that programmatic takes over TV in a "big" way reminds me of the prediction made a while ago by a major ad agency guy that half of all media buys this year would be made programmatically. We all know--or should know----how fanciful this one turned out to be. As for "TV" finally caving in to programatic, this aint going to happen in a big way unless the sellers---broadcast networks, syndicators and cable channels---- are convinced that such a move is to their advantage. So far, I'm at a loss to see how that is in the cards for 2017 or later---except for margnal timeslots, very low rated channels, etc.

  2. Michael Hubbard from Media Two Interactive, December 10, 2015 at 10:54 a.m.

    Ed, I guess I'm not following you and will have to do some searching, but it was my understanding that last year programmatic accounted for 45% of all digital media buys.  I don't know that that includes the Google Display network, which in my eyes, was the first true programmatic tool - which would inflate that percentage higher.   So are you referencing someone said 50% of ALL media buys?

  3. Henry Blaufox from DragonSearch, December 10, 2015 at 11:56 a.m.

    Hello Ed,

    On your fifty percent matter - are you referring to the IPG program begun in 2013 to do 50% of all their agencies' buys programmatically by the end of this year? That was the goal they set, though it applies only to the IPG US agencies, not the entire industry. Since their standard for measurement was total dollars spent, and of course broadcast is the overwhelming majority of budgets, I am not sure if the hit the target. Broadcast programmatic is still in early stages. But online of all types should have easily cleared that threshold by now.

    Videology and similar technologies should make that goal a reality in the foreseeable future; I've been following their offering, that's why I am willing to make the claim here. It's more precise targeting, and more important, the elimination of redundant, inefficient workflow that makes programmatic attractive.

  4. James Curran from www.staq.com, December 10, 2015 at 12:21 p.m.

    Also, I think what Scott and what everyone is saying about "Programmatic" in linear isn't bidding.... It's "automation and targeting" The way it's sold is completely different. The networks may not give up upfronts and the old way of packaging their media products, but buying it will be automated and the targeting more finite.

    And yes, 2017... Everyone is investing / building now, it will be released this year and adopted next.

  5. Ed Papazian from Media Dynamics Inc, December 10, 2015 at 12:53 p.m.

    Henry, I don't recall the exact referrence about the 50% of all media buying being programmatic by 2015, but it was one of many predictions made on Media Post and that's why I referrenced it----the point being, many predictions of this nature never bear out.

  6. Ed Papazian from Media Dynamics Inc, December 10, 2015 at 1:21 p.m.

    James, let's back up a minute and look at the situation re the upfront. Approximately 65% of national TV ad dollars are placed on an "upfront" basis---or roughly $28 million, counting all dayparts and network types ( broadcast, syndication and cable ). In most cases---a few giant brands being exceptions----these are corporate buys where all of the entity's brands are lumped together, not bought individually. So how does one target for the corporation as a whole, when the various brands have different goals and, often, different  targets? The answer is that you have no effective targeting system that deals with this reality; moreover, the sellers---especially in primetime---will force you to take "bundles" of programs, not just the ones you or your "trading desk' may prefer. As for the rest of TV---primetime scatter on a national basis plus spot buys, there is some reason to see hope for programmatic, though not immediately---perhaps in three or four years, once the basic issues are worked out. This is especially true for spot TV , but less so for national scatter negotiations because in the latter case, availabilities are limited and not evenly distributed across all shows.

    Ultimately, it will be the sellers' decision, not the buyers', about going full programmatic, not partial programmatic ( "computer assisted" ) as is mostly the case now. As I keep pointing out, until the sellers are convinced that they can sell their "premium" GRP inventories via programmatic and make more by doing so, it's not going to happen in  a"big" way. Just my humble opinion, of course.

  7. Henry Blaufox from DragonSearch replied, December 10, 2015 at 3:05 p.m.

    Ed,

    In your reply to James Curran, I think you answered your own question, at least in part. You describe how the up front process operates now, with corporate buy side buying large blocks of time from network sell side in one swoop, which is then apportioned to their multiple brands. That is what targeting software will change. What hasn't been possible before will be, and is in development now. In your example, one could envision  a process in which the corporate budget and buy decisons are made with input from marketers responsible for each brand. Then when the time comes to bid via online communication, the buyer could have what amounts to a spreadsheet, chart matching desired audience matched to best program that corresponds, the brand being represented in the buy, and the price ranges to bid. An auction or other negotiating session could take place using that data to drive it. That is just one scenario for how this could work.

    This will occur incrementally, not all at once - and the composition of package offerings will vary based on a number of factors, such as price, popularity of programs with commercial slots available, willingness of sellers to offer deal combinations, and much more. It is not one size fits all, and not for all broadcast time. One obvious example - no way will a network offer slots on the Super Bowl programmatically. It is so lucrative there is nothing to gain.

  8. Ed Papazian from Media Dynamics Inc, December 10, 2015 at 1:28 p.m.

    Michael, it is my recollection that the referrence was to all media, which I found to be laughable, though it's possible that the person making that estimate really meant to say "digital", in which case his prediction made more sense.

  9. Leonard Zachary from T___n__, December 10, 2015 at 2:45 p.m.

    Programmatic will find its way to Legacy TV when the studio execs get a clue on aligning with the right technology platform.....

  10. Ed Papazian from Media Dynamics Inc, December 10, 2015 at 3:48 p.m.

    Henry, keeping it simple, let's focus on primetime broadcast network upfront buys. Since these are corporate, not brand by brand buys and both buyer and seller require a single metric to negotiate their CPMs or CPPs on, what do they use? Do they take the average show by show indices of all of the brands, perhaps weighted by their total GRP or dollar representation in the budget? If the various brands have different profiles and target definitions, isn't it likely that averaging them all together would tend to mute most of the differentials that are assumed to exist from one show to the other? Wouldn't you end up by losing the value of superior brand targeting and be just as well off using adults 18-49 or 25-54?

    A second question concerns the assumption that a seller could allow cherry picking since even if some advertisers preferred one program genre over others, different advertisers would take up the slack and buy time in those show shunned by the first group. Result: a total sell out. Not so. If you take a look at sources like MRI you will see that certain shows index high for a lot of products and services while others usually index low---with a few exceptions, such as pharmaceuticals. So a seller who allows his program lineup to be cherry picked----without bundling everything together--- would have a very hard time monetizing a considerable portion of its GRPs to the fullest, unless CPMs on the most desireable shows were raised significantly----in which case, targeting efficiency is lost.

    I do think that programmatic-style analysis would be useful when it comes to allocating the upfront corporate buys to individual brands, however, until the upfront, itself, is abandoned and all buys are made on a brand by brand basis, the benefits of supposedly superior targeting just aren't there. Also, it must be noted that were each brand buying time on its own, they would be at the mercy of the sellers----unless one could oblige the sellers to publish fixed rates for all GRPs for all shows and abide by them, in effect, abandoning all negotiating. That, in my opinion, is really looking for a miracle.

    To be continued-----

  11. Doug Garnett from Atomic Direct, December 10, 2015 at 5:52 p.m.

    This article speaks volumes - and suggests dramatic failure of programmatic in TV. THIS was the year it was supposed to happen...then next...now we're told 2017.

    My prediction? Programmatic targeting has little advantage over the interest based targeting already used in TV. And it has a huge downside. Byron Sharp recently observed that "Wastage are your next customers". If programmatic were to succeed, brands would shrink - because the accident and serendipity needed to expand a brand would be lost.

    It is interesting to note that despite the web's huge claims about the value of targeting, web CPC's, CPMs, etc are exceptionally low. IF the claims has been true, then web outlets would charge a premium for what they deliver (basic economics). But they can't charge a premium because what they do isn't effective enough for it. Hmmm...

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