Video advertising is somewhat a problem child in today’s programmatic world. Agencies struggle to place programmatic video buying in either a programmatic team or a TV-buying team – with many choosing to create a new silo of specialists who have a rare combination of skills spanning audience buying, data analysis, and creativity.

At ATS New York, which took place on 3 November, TV and digital experts Irfon Watkins, CEO, Coull, Richard Sobel, SVP AOD Solutions, VivaKi and Denise Colella, SVP, advanced advertising products and strategy, NBCUniversal discussed the need for publishers to adapt in order to stay relevant, how marketers no longer need to decide between mass-reach and niche-targeting and why data is not necessarily driving value for publishers. The panel was moderated by Vincent Flood, Editor, Video Ad News.

Adapt to stay relevant

There are scores of reports that show consumer behaviour is changing. People are spending more time on mobile devices and consuming more and more video content on those devices. Social media is a huge driver of young, digital-native traffic to sites such as Buzzfeed.

In August 2015, NBCUniversal invested USD$200m in Buzzfeed, a move that positions NBCU as a publisher that is capable and committed to growing with society and adapting to changes in media consumption.

The average publisher does not have same bank balance, infrastructure and resources as NBCU. These publishers need to adapt through the application of learnings and relationships. In the TV space there are a fewer options compared to digital ad tech – but there are options. Colella said: “There’s definitely a stronger trust and relationship approach when it comes to data in linear compared to digital [we need to understand] how do we use learnings from digital and bring them over to TV to make it more powerful.”

It’s not only publishers that need to adapt. It is thought that over half of all video ads are served into standard MPUs. However, buying platforms are unable to report on the size of the unit an ad is played in. This seems odd in today’s data-driven ecosystem.

“Targeting content and player size are basic things that should be done before you get into other targeting”. – Irfon Watkins, CEO, Coull (pictured, right)

However, it’s a two-way street on which publishers and brands need to cooperate. There has to be a commitment of understanding both parties’ objectives.

Marketers can have mass-reach AND niche-targeting

“We don’t need to decide between mass reach and highly targeted, we should be able to do both” – Denise Colella, SVP, advanced advertising products and strategy, NBCUniversal (pictured, left)

A common misconception is that if you want reach – you buy TV, and if you want to buy highly targeted audiences – you buy digital. The panel were in agreement that data can offer TV buyers everything it offers digital buyers and that there is no reason marketers and ad tech vendors should not be planning for programmatic delivery of ads in the linear space.

“There’s a lot of data that can be used [in TV], applying the more unique user profiling, using data, using insights, to be more targeted, that is the promise. How individualistic can we get? Let’s move away from segments and apply that to everything that we do.” – Richard Sobel, SVP AOD Solutions, VivaKi (pictured, left)

Media planners will face challenges when programmatic targeting is an option throughout the funnel. The problem is that as you get further into the funnel, key performance indicators (KPIs) become more specific which allows programmatic to be efficient. Further up the funnel, KPIs are less specific, making it harder for marketers to prove the efficiency of programmatic buys.

This is an area where TV will be able to flourish, as according to Colella: “Additional data is becoming available in TV from the feedback cycle; a marriage of what’s available through content and viewership is very powerful.”

Data is not necessarily driving more revenue for publishers

Trust is an issue when it comes to data. Many in the industry have been burnt by bad data practices. Data suppliers have sold data they do not own, old data has been sold as fresh and in the most extreme cases fake data has been created and sold.

However, in order to increase the efficacy of advertiser campaigns, the industry needs to find a way to bring data together to help advertisers reach niche audiences at scale and move past legacy concerns.

Programmatic is not something that is set up in a vacuum and forgotten about.

If the data is premium and worthwhile it is worth paying for. Campaign optimisation should not be about reducing spend; the objective should be to improve performance.

Another challenge in the industry is the labelling of inventory. Lack of trust in the space means publishers have to label inventory properly, in a way that is real and genuine. Furthermore, media buyers need to work with audience targeting partners who will work with data and publishers in a trusted way.

“You can’t offer to sell apples and actually sell chocolate.” – Irfon Watkins, CEO, Coull

Watkins continued: “Then you have to go back and get a refund. But you have to use third-party vendors to verify whether you have bought an apple”.

Balancing supply and demand

“It’s less about a TV versus a phone, it's about getting a video played and making it feel like that is a natural part of the experience." – Richard Sobel, SVP AOD Solutions, VivaKi

Addressing the issue of the supply side failing to meet the demand for video advertising, Sobel encouraged marketers to forget the device divide and focus on experience.

In an ecosystem that is more complicated than traditional digital (or programmatic for that matter), where producers do not necessarily own the content where video ads will be played, there is value in scarcity and premium content needs to be managed accordingly.

In TV, upfront advertising deals fund production of content for the following year’s programming schedule. It is unlikely that this model will go away as production of TV content is so expensive that the budget needs to be guaranteed. Which raises the question of whether programmatic will always be an addition to upfront?

Cost of development will prohibit programmatic buying of premium slots, e.g. Super Bowl. However, automation of operations will bring increased efficiency and increase the value of programmatic buys.

It may well be that the industry needs new ad exchanges to fuel the growth of programmatic TV, pointed out Watkins. He said: “Exchanges are a number of years old and maybe not designed to do what we need them to do now.”

Is there room on the sell side for programmatic companies to move into TV?

It would appear that there are plenty of opportunities for supply-side digital technologies to enter the TV space: Be that in a data way, a creative way, streamlining workflow, or creating transparency in buying. These are all areas that are relatively untouched by vendors from the tech space.

However, if there’s one thing to take away from this discussion it is the need for tech vendors to approach programmatic TV from a TV perspective and not take a digital approach. There is a large wall between TV and programmatic and it doesn’t stop at terminology.