This week, NBCUniversal made a splash by announcing the extension of NBCUx, its digital programmatic platform, to linear TV. NBCU described the move as the first national programmatic TV offering at scale, as MediaPost reported.
Mike Shields — The Wall Street Journal “CMO Today” columnist who recently argued that programmatic television is “stuck in first gear” — characterized the NBCUx news as another PTV “baby step.” His overall take on the initiative: “Part NBCU looking to make noise and say it’s first, and part NBCU trying to get ahead of a trend that’s likely inevitable.”
In addition to some advertisers and agencies that use private exchanges and their own data and third-party data for media plans, NBCU said that it will allow “select” demand-side platforms (DSPs) that “meet the company’s requirements” to integrate NBCU linear TV inventory into their plans.
NBCU noted that clients will be able to choose which of those DSPs they use to generate audience-based media plans — but it didn’t, for now, identify the eligible DSPs.
Indeed, NBCU said that it won’t be revealing more specifics on the NBCUx extension until the upcoming television upfronts.
With that context in mind, ABI asked some industry players for initial reactions to the core news announcement.
Ted McConnell, VP of integrated media at DSP Rocket Fuel, declined to disclose his company’s relationship with the NBCUx programmatic initiative for the present. However, he noted that “as a player who is deeply immersed in programmatic TV,” Rocket Fuel is “delighted when new suppliers jump in with both feet.
“We believe this is the best way to learn about this still-nascent market,” McConnell stressed. “In order for programmatic TV to realize its potential, more participation across the ecosystem is needed, particularly as it relates to inventory. TV networks, especially those like NBCUniversal, who have a strong digital presence, will play an important role.”
Doug Garnett, founder and CEO of full-service television advertising agency Atomic Direct — and an acknowledged doubter of the ultimate extent of PTV’s benefits for advertisers —offered a more skeptical take on the NBCUx development.
“The term programmatic means many things to many people,” he wrote in an emailed response. “NBCUx wrapped this announcement in the idea of programmatic, but it doesn’t sound like programmatic. Where there appears to be value in what they’re doing seems to be an automated system for final bidding and buying ads on the NBC properties.
“This is clearly quite interesting and will be valuable for many,” Garnett continued. “However, there are limits on who can participate and have to participate in the upfront. That’s really not what the digital world thinks of as ‘programmatic.’ It’s possible, then, that it’s automation plus new ways stations are bundled. They imply that it will be easier to buy audience and have the NBCUx algorithm spread that buy across properties, but the announcement is pretty fuzzy about how it works.”
Garnett adds that he has some concerns. One is what it will cost media to get connected to the new system, and whether the value will justify those costs.
“Most media buyers are able to get significant savings by negotiating with the media reps,” he notes. “I would assume NBCUx would claim that they’ll deliver better targeting at the same price … but there’s no evidence that’s the case. Right now, most programmatic offerings we’ve worked with are low priced … and after all the arguments from programmatic reps about ‘highly targeted,’ the real value that seems to be attracting [buyers] is the low cost.”
While the NBCUx extension might turn out to be the start of “something of value,” he says, “on the surface, it seems there’s risk that the advertiser gives up negotiating power and gets little in return.”
In an interview on the day before NBCU’s announcement, ABI asked Walt Horstman, president of programmatic TV sales platform firm AudienceXpress, about his response to those who argue that PTV is stalled for a variety of hard-to-overcome (and possibly valid) reasons.
Horstman stressed that PTV is still very new, and very much in “evolution” mode. And he noted that there is good reason why national cable networks are at a less advanced stage in implementing programmatic than local multichannel video programming distributors (MVPDs), in particular, and also behind local broadcaster inventory. Both of the latter, he noted, have been driven by the need to aggregate fragmented inventory into a national footprint, and then apply advanced audience data and automate targeting capabilities.
However, Horstman pointed out that the national inventory providers last year greatly accelerated their partnerships and efforts to add advanced audience data to their inventories, and are now “making great strides” on that front.
“I’m looking forward to seeing more interesting developments from the networks — the next cycle, which is what some of them will actually do in terms of using the data,” Horstman added.