The Walled Gardening Of TV

Madison Avenue loves bemoaning its love/hate relationship with digital’s big “walled gardens” -- Google, Facebook and now Amazon -- which hold both the access to audiences, as well as the means of targeting them -- and it looks like they’re poised to let the same thing happen with the next generation of TV.

Roku’s $150 million deal to acquire Dataxu, possibly the best independent DSP (demand-side platform) enabling OTT and connected TV, most likely will move transparency about audience targeting more to the supply-side -- and the demand-side seems resigned, if not okay, with that.

“I don’t think it’s good for anyone to make a walled garden,” Magna Global Director of Strategic Investment for Advanced TV Julie Anson said during a panel I moderated at MediaPost’s recent TV and Video Insider Summit.

It was her first reaction to the Roku/Dataxu deal, which has just crossed the wires as we were taking the stage.

Her second thought was: “This was a clear step toward becoming an Amazon, which has its own DSP, a Xandr, which has their own DSP, and Ampersand, which one day will have their own DSP.”

While such consolidation may seem inevitable, it effectively takes the “D” out of DSP, moving it from the demand-side to a supply-side sales organization.

That’s “ironic,” Anson continued, noting that ideally, such mergers should remain market-neutral, but the minute a DSP’s accountability shifts from a buyer to a seller, that is likely to change.

“The platforms are actually the partners that can break those walls down, so it is ironic that when companies buy those platforms up, they are removing the beauty of a platform,” she explained, adding: “The beauty of a Dataxu is that they are agnostic. They’re not agnostic anymore.”

After 40 years of watching the trend move in that direction, I’ve come to the conclusion that Madison Avenue “neutrality” actually is not the most important thing on Madison Avenue. Simplicity and ease of use are. And when push comes to shove, media buyers -- and yes, even their clients -- prefer an efficient, scalable and easy-to-use solution, even if they lose market leverage.

And I believe that as the media marketplace becomes increasingly fragmented and complicated, they gravitate more to the ease-of-use side of that equation.

It therefore seems to me like a good time to invoke one of my favorite questions: Why doesn’t the U.S. advertising and media industry do what ensures actual neutrality in other markets around the world, and form a JIC?

JICs, or joint operating committees, are committees comprised of cross-industry stakeholders -- both buy and sell-side -- that come together to set the parameters of defining and measuring audience data so that everyone is on the same page.

It may be too late for the demand-side to assert that kind of marketplace leverage for most of digital -- barring regulation -- but with the still nascent OTT/connected TV marketplace, I believe agencies and clients still have the leverage, because they control the allocation of TV and advanced TV budgets.

It seems like a good time to begin leveraging that.

If not, I look forward to moderating panels about Madison Avenue’s frustration with TV’s walled gardens sometime soon.

2 comments about "The Walled Gardening Of TV".
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  1. John Grono from GAP Research, October 28, 2019 at 7:56 p.m.

    Great artice Joe.   I have two comments.

    First, I wonder what the correlation between reduced agency remuneration and "media buyers -- and yes, even their clients -- prefer an efficient, scalable and easy-to-use solution, even if they lose market leverage."

    When the client reduces remuneration it necessitates reduced headcount and greater reliance on 'black-box' solutions.   The underlying message is quality, leverage, transpaency, control etc. are not at the top of the priority list ... when push comes to shove.

    Second, I agree 100% with you on JICs.   I have had the privilege of representing media agencies on seven separate JICs here in Australia over the past 15 or so years.   I'm at that stage where I am passing the baton on and now just sit on one, but I still advise behind the scenes, especially with two JICs ramping things up in the next 12 months.

    In my experience it is the best way to achieve solutions that most closely reflect the needs of the media owners, media agencies and advertising clients - all within the realm of affordability, and with basically equal weight of opinion from all parties.   That is not to say that discussion is always plain sailing - but that is all part of finding the common ground.   'Solutions' developed in isolation tend to fall short of expectation, be late, not delivered in a data-friendly way, and have a higher propensity to wither away quite quickly and not return on their investment.

  2. Ed Papazian from Media Dynamics Inc, October 29, 2019 at 7:11 a.m.

    John, regarding the relationship between agency media buying fees and how the buyers go taboutbtheir business, it all depends on what medium you are talking about. In the case of digital media, if the client opts for the use of programmatic buying plus "data" for targeting, squeezing the agency on its fees for doing the creative and the media planning is small potatoes. The bulk of the cost---as much as 30% of the billings----goes to the various systems as well as the ad distribution phase and the client has to foot these bills, like it or not. When we come to broadcast TV networks buys, however, the fees are around the 1% level for all aspects of the buy---ratings, post buy evaluations, make good negotiations, etc. and I have not heard of much squeezing in this particular area. 

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