Programmatic TV: What's Gross Got To Do With It?

  • by , Op-Ed Contributor, December 17, 2015
On the phone the other day trying to advance a local programmatic TV negotiation, I queried the vendor on whether there was a transactional fee for its service. Some platforms, like Videa, pass the fee onto the TV station or publisher; others, like Comcast’s Audience Plus, offer all-inclusive gross packages, e.g., inventory, transactional costs and posting. Understanding and accepting that we were engaging in digital modeling, of course there would be an ad-serving fee. No problem. Gross or net?


Which led to a contemplative moment.

In the past, when I purchased linear TV inventory -- national or local -- there was a gross fee. An ad agency purchases at gross cost but receives the traditional less 15% net bill in the mail -- I mean, electronically. Ad-supported video-on-demand billing is split: sometimes gross, sometimes net depending on the TV network/media company. TV network spots coupled with digital commercials purchased through upfront “unified packages” are grossly charged. TV network digital inventory (full episode players, TV Everywhere apps) purchased unaccompanied by linear TV inventory is net. Over-the-top (OTT) or connected TV inventory digitally slotted and generally purchased by digital folk is net. Streaming video destinations net. Programmatic TV national platforms offer a choice depending upon lineage.



If the parent company existed in the post-Paleolithic age of media -- that time period occurring after smoke signals and drum pounding were no longer in vogue -- most likely billing would be gross. However, if it was borne out of the neo-post Paleolithic age when broadband ad networks roamed the realm, then it would be billed net.

“What do you mean?” the voice queried.

Which led to a contemplative moment.

Tina Turner.

Most people are familiar with Tina Turner’s 1984 breakout single “What’s Love Got To Do With It?” Few are aware that it was originally titled “What’s Gross Got To Do With It?” My understanding: as the single was going to press, an A&R guy (artists and repertoire) called for a title change and a modification of a lyric or two. A sample:

What’s gross got to do, got to do with it.
What’s gross but an old-fashioned notion.
What’s gross got to do, got to do with it.
Who needs a new billing metric
When at heart the system is not really broken.

It may seem to you
That I’m acting confused
When you send a bill
If I tend to look dazed
I’ve read it someplace
That I got cause to be amazed.

I’ve been thinking on taking a new direction
But I have to say
I’ve been thinking about my own protection
It scares me to feel this way.

What’s gross got to do, got to do with it.
What’s gross but an old-fashioned notion.
What’s gross got to do, got to do with it.
Who needs a new billing metric
When at heart the system’s not really broken.

Dial tone.

This post was originally published in an earlier edition of Audience Buying Insider.

1 comment about "Programmatic TV: What's Gross Got To Do With It?".
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  1. Ed Papazian from Media Dynamics Inc, December 18, 2015 at 10:08 a.m.

    Mitch, how can it be a "programmatic" buy if you were talking to the seller about whether it was gross or net? I thought that the computerized "trading desk" did all of that, plus evaluating all possible buys---especially from "long tail" vendors--- so you got the best possible deal? Just kidding---I couldn't resist.

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