In the race to develop a programmatic infrastructure to buy and sell TV viewers the way agencies and trading desks now trade the right to serve ads to individual online users, Videology has begun working with addressable TV ad technology developer Invidi. The deal, which is not exclusive, enables Videology to use its enhanced audience targeting technologies to deliver specific TV ads to individual TV set-top boxes via Invidi’s technology.
“What Invidi does is it makes it possible for you to deliver an addressable ad to a set-top box. What we do is make sure you’re delivering the right ad,” explains Videology Chairman-CEO Scott Ferber.
Actually, Videology does a little more than that. While targeting the right ad to the right viewer is at the core of its data science, Videology’s system also factors in all the supply-and-demand-based marketplace variables to determine what is the most effective yield for the buy- and the sell-side of the addressable TV advertising marketplace -- much the way online’s and mobile’s trading platforms enable real-time bidding to function.
That’s no easy task, Ferber says, ticking off such data variables as “audience,” “performance,” “inventory” and “pricing” that all need to be managed in or near real-time in order to ensure the right ad is served on behalf of the right brand to the right viewer at the right time.
“It is a 10 to a 50 exponential problem in terms of the number of permutations involved here,” he says, explaining the number of mathematical calculations that could be involved in making a decision to serve an ad to an individual TV viewer utilizing all that data logic.
“There are all sorts of performance requirements -- technological things -- so many pieces and factors that come into what that decision is,” he continues. “That’s what we do. We take all that information, crunch it, and say that for this opportunity, this is the right message for the right consumer on the right box at the right time.”
Ferber says Videology has already quietly begun delivering TV ads on that basis for a “multiple” number of undisclosed advertisers, which the company declined to reveal, citing its clients’ requests for anonymity -- but he said those campaigns have already been served to about 13 million households out of a potential 40 million households served by cable and satellite TV operators utilizing Invidi’s addressable TV ad technology.
“What’s unique about this is that, for the first time, we can actually do what we do in digital media on linear-feed television, which is serve a different ad to user watching an individual set-top box in a household against different set-top boxes watching the same content at the same time.”
Currently, the inventory Videology is working with involves the two minutes per hour of “local” TV advertising avails that national TV networks give to local operators as part of their distribution agreements -- and Ferber says Videology hopes to demonstrate that its data and technology can improve their yields enough that they free up more of their inventory to be traded via Videology’s platform, but more importantly, that it sends a signal to the national TV networks that distribute through the same cable TV infrastructure to put some of their “national” advertising inventory into the system as well.
“The easiest thing is to activate first is the two [local] minutes [per hour], because there are fewer people to get agreements from, but the big bang is getting the other 14 minutes of national inventory [per hour],” he says.
Ferber -- who helped pioneer the current online audience-buying marketplace as founder of one of the first online advertising networks, Advertising.com, in the late 1990s -- in effect is trying to bring that same innovation to the TV advertising industry. But he’s not alone. Another early Internet TV advertising pioneer, Dave Morgan (founder of online behavioral targeting firm Tacoda) is also utilizing advanced analytics to make TV advertising more effective and efficient, as is PrecisionDemand, a company run by former Madison Avenue media buying chief Jon Mandel.
Meanwhile, one of Invidi’s chief rivals in the addressable TV ad technology business, Visible World (see separate story in today’s RTM Daily), has spun off an audience-buying company called AudienceXpress that also is enabling advertisers, agencies and local cable TV operators to trade unwired networks of local cable TV audiences based on advanced data targeting attributes.
Big agencies and agency trading desks, meanwhile, are setting up their own proprietary TV audience-buying systems, which often utilize their own proprietary data on the underlying value of audience targets.
Videology’s Ferber says that’s all healthy for the fledgling programmatic TV audience-buying business, because it means players on all sides want to bring the same scientific approach to targeting and trading TV audiences, which has begun to transform the online, mobile and social media marketplaces.
One thing that he says is different about Videology is that it’s 100% “neutral” and will work with both the demand- and the supply-sides to improve yields for both, and it will also work with any infrastructure player, including Invidi rivals Visible World, Black Arrow and anyone else who can deliver an ad targeted to to the right TV viewer.