By Mike Shields
Over the past few years, the TV business has been trying to adopt principles of digital advertising, such as data-driven ad targeting and technology-driven automation.
But there’s one aspect of digital media that many ad stakeholders would like the TV business to avoid: the walled garden.
That metaphor, commonly attached to digital ad giants Facebook and Google, refers to the idea of a closed ad buying system. Media buyers say that when they run data-infused digital ad campaigns, they can employ technology to target people across hundreds, if not thousands of websites. But when they work with Google and Facebook, they are often required to used these companies’ technology and tools and data sets–and they can’t always take that data with them.
Now that nearly every major TV company is building out its own data-centric ad practice, some buyers worry that the NBCUniversals and Viacoms of the world may be trying to build their own walled gardens. These ad buyers worry that such an approach will limit the growth of this nascent ad sector.
A quiet debate is unfolding: does TV need its version of Costco – a member’s only super store supermarket of aggregated ad inventory and data? Some ad executives believe that the biggest players in TV should coalesce around some sort of a central technology platform, through which marketers could buy ads across multiple networks, using a multitude of data sources in a uniform, automated fashion.
“The big thing we have to resolve is whether we’ll have walled gardens at each network,” said Jonathan Bokor, senior vice president and director of advanced media at ad buyer MediaVest. “If all of the TV networks look at the power of Google and Facebook, they’d all love to replicate that. And we’re not so into that.”
What’s the objection to these so-called “walled gardens” anyhow?
For example, an ad buyer for a diaper marketer might want to target new moms online. That ad buyer might use preferred technology, data and measurement partners to target this audience across the Web. Facebook would likely also offer the ability to target these new moms with great precision, but this advertiser may not be allowed to use its full data sets to target the social media service’s users, and they may not be able to use Facebook’s data elsewhere. That could potentially lead to that marketer targeting the same person more than once. Plus, the reporting and measurement that the advertiser gets back from Facebook won’t necessarily match what that advertiser is able to obtain from other partners.
Beyond data and reporting, there’s a technology issue. For example, when trying to target new moms on YouTube, Google’s policies requires that advertisers use Google’s proprietary ad buying software, and not a marketer’s preferred set of technology.
Ad buyers would prefer not to see the same dynamic play out in TV. For example, they might be able to target new moms across NBCUniversal’s collection of properties using one data set, but might have to employ different data sets and different tools across properties in Time Warner’s Turner cable unit. That means they wouldn’t necessarily be able to consistently apply the same targets across the TV landscape, which could lead to duplication and holes, while also yielding a potentially labor intensive process.
“We need an ability to look across the whole ecosystem and understand where the custom audiences are that meet our client’s objectives,” said John Swift, Omnicom Media Group’s chief executive of North American investment. If each TV giant builds its own tools, processes and data segments their own way, they become a headache to work with, which slows growth for the entire market, say both ad buyers and sellers.
“I’ve talked to lots of agencies, and one of the complaints I get is that everyone is doing it differently,” said David Morris, executive vice president and chief revenue officer at CBS Interactive.
Michael Strober, Turner’s executive vice president of client strategy and ad innovation, agreed. He said the message from media agencies is that, “it’s very hard to scale this because we don’t only buy Turner, we buy across the entire TV market.”
Mike Dean, vice president of programmatic and data-driven sales at ABC, said that he’d like to see the industry come to an agreement on a common platform,” We are a big supporter of that idea,” he said.
Still, there is deep skepticism. It’s worth noting that several other attempts at collaboration in the ultra-competitive TV industry have struggled. For example, a decade ago a group of big marketers partnered to create an online TV-buying marketplace in conjunction with eBay that ultimately gathered little steam.
In fact, some think that the idea of a common ad selling platform would be seriously damaging to the $70 billion-a-year TV business.
The thinking of those skeptics is, why would CBS want to put ads within hit shows like “The Big Bang Theory” into the same pool of inventory as NBC’s “The Blacklist” and allow an ad buyer to cherry pick whichever shows best deliver upon that marketer’s data set? Wouldn’t that hurt everyone’s prices?
“If you’re a seller, there is no incentive to have your stuff commoditized that way,” said Dave Morgan, chief executive at Simulmedia, which helps advertisers buy more targeted ad space through data.
Julian Zilberbrand, executive vice president of Viacom’s recently formed Audience Science group, said that in his experience, executives from the digital media world often try to force digital solutions on TV where they’re not necessarily a fit.
“I don’t envision a single entity for data-driven TV ads.” he said. “There needs to be a free market.”
There’s also the question of who could or should build this mythical TV ad/data platform? Some ad executives are of the opinion that an ad tech company such as Videology would make the most sense. Others believe that such a platform should come from a TV company.
Turner has actually built a set of proprietary algorithmic model and set of tools designed to help advertisers best determine which programs across the entire television ecosystem a particular audience is likely to watch using. The system relies on predictive estimates rather than historical data. The company is considering how it could potentially approach the market, Mr. Strober said.
Mr. Morris said he doubted that the TV industry would collaborate on a single product. But he could see the value in a third party building something along the lines of a common “audience management platform” custom built for the TV market’s unique needs. “We’re not opposed to that concept as long as we maintain control of inventory and price, and we decide who has access to our data,” he said.
The industry trade group CIMM, or Coalition for Innovative Media Measurement, is pushing for a data collective along these lines,” said Jane Clarke, the group’s chief executive and managing director.
“We have started talking about having everybody in TV pool together data,” said Ms. Clarke, who added that CIMM is exploring a pilot test with several media partners who would use this data collection for ad targeting.
Back in October, the Wall Street Journal reported that Comcast Corp. was talking to media research companies and TV networks about potentially licensing its viewership to them for advertising purposes. In addition to those discussions, Comcast is also talking to rivals Cablevision and Time Warner Cable Inc. about possibly jointly licensing viewership data from set top devices, WSJ reported.
Other stakeholders believe this entire discussion is premature. Joe Marchese, president of advanced advertising products for 21st Century Fox, said until TV ads are served dynamically like they are on the Web, the idea of a centralized TV programmatic platform is less relevant.
Keith Kazerman, head of advertising sales product strategy and development at Discovery Communications, said the industry still must nail down many fundamental issues for data-driven TV advertising, such as measurement and pricing, before developing a common platform.
“The technology isn’t necessarily the pain point right now,” he said. “It’s the business model and business rules.”
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