While programmatic TV is a huge opportunity, setting up the infrastructure is going to require a lot more work than display and video advertising did. Here Lewis Sherlock, Senior Director of Strategic Accounts, EMEA, at Adap.tv, explains how he thinks the UK and France could be ready to get started by the end of next year, how video isn’t necessarily stealing money away from TV, and he discusses the perceived shortage of premium supply in the video market. Finally, he told VAN the three barriers to programmatic progress that he’d remove. Lewis will be speaking at New Video Frontiers in London on October 22nd.
Adap.tv’s recent State of the Industry survey found that most of the video money was coming over from broadcast. Do you think that trend is likely to continue, or is the programmatic TV evolving at such a rate that it will soon be able to win back money from video?
It is true that more and more money is coming into video from broadcast teams, but it’s not necessarily eating away at TV budget. Most broadcasters I speak to, and data supports this, indicate rising ad revenues in TV. In other words, the overall budget pot for video as a whole is rising, as advertisers increasingly want to connect with an engaged audience through sound, sight and motion.
If anything, in the near future TV and video will benefit further from an advertiser’s ability to pinpoint, through attribution, their value in the marketing funnel. Until recently, this has been difficult and there is always a risk that marketers undervalue video because, although it can strongly influence a user, it’s not a high-touch channel. There are fewer video ads seen by users than search or display ads, for example.
With companies such as Convertro, purchased by AOL earlier this year, we are now able to determine the value of all media, online or offline. Budget shifts could come from other channels, such as affiliate or search, which currently tend to scoop up a lot of the end-of-funnel conversions as traditionally these do well on the ‘last action wins’ model that has been so engrained in digital for the past decade.
This is one of the key areas of focus for AOL and a main driver behind the launch of the ONE platform; making this type of data not only visible, but actionable across all screens in real time. Programmatic TV is evolving, but not at such a rate that video suffers. It’s still very nascent, especially in Europe. Programmatic TV will enhance how TV is bought. It will be part of a planning mix between online video, traditional TV and programmatic TV.
How long do you think it will take for programmatic TV to take off in Europe?
Good question. Agencies want programmatic TV and they have the power to influence key stakeholders in this space, while set-top box providers, broadcast networks, data vendors all play a part in programmatic TV. It relies on a lot of these components coming together. Adap.tv’s programmatic TV platform is already live in the US and is transferable to Europe. But, for this to become a reality, agencies have to support it over here. We believe we will see the foundations being laid down in the UK and France in 2015, with the potential for real campaigns to be running by the end of the year. We have the support of some agency groups globally, which will help us tackle the fact that it’s a challenging space with many hurdles to overcome.
Are you still seeing a shortage of premium supply? What is likely to be the solution?
Not at all. Adap.tv now has over 40 private marketplaces across Europe and is able to link sellers directly to buyers. Many of the other boutique supply side platforms are also doing a good job at convincing premium suppliers and broadcasters to adopt programmatic trading. People like StickyAds in France, Improve Digital in the Netherlands, Smartclip in Germany, and Adap.tv and LiveRail in various regions are all playing key roles in developing this space.
AOL itself has made 100% of its inventory available programmatically, and this is also the case for AOL video. In 2013, we saw a lot of testing and learning and that is still prevalent in 2014 but most premium suppliers now have a much tighter handle on their video strategy around programmatic and are implementing it internally. The technology solutions to trade programmatically are already there – delays are usually due to a cultural barrier within organisations that need to come together. It takes time within the bigger organisations that typically make up premium supply in most markets to have the right people and collaboration internally to plan for this trading shift.
How has Adap.tv been integrated into the wider AOL business since the acquisition? Has anything changed?
Adap.tv has become a critical part of AOL’s strategy. There are three core pillars to the AOL business, now and moving forward: video, platforms and original content. Adap.tv sits firmly in two of those so you get a sense of why the company was a key acquisition for AOL.
The unified platform model, approach and ethos that we brought to the table have also been extended to other facets of the business. We are a software company that gives buyers and sellers the ability to manage their video business by licensing our technology platform. This allows the business to scale quickly moving forward – this is demonstrated by the shift in AOL Platforms business revenue attributed to programmatic, from 4 percent in 2013 to 34 percent in 2014. Being a true platform and the integrated way in which we go to market has brought about that change for the wider AOL business.
Some of the key stakeholders in Adap.tv have been the driving force behind the ONE by AOL platform, as well as bringing together the product and vision to align, TV, mobile, display and video on both the buy and sell side. On top of this we have added attribution and a data management platform to make planning and data activation between channels much more valuable for clients. One simple integration, for example, is having a common cookie domain across platforms. This allows clients to activate data seamlessly and at scale across our media buying platforms; Adap.tv, Adlearn Open Platform (AOP) and our TV marketplace.
If you could remove one barrier to the progress of programmatic trading, what would it be and why?
I would say there are three barriers that each hold equal weight – brand safety, organisational change and attribution.
Programmatic provides clients with huge scale and value especially around data activation but there is often little consideration for what this means from a brand safety perspective. Scare stories may be exaggerated, but can still deter a client from trading in this way. Adap.tv has set the brand safety bar high, but advertisers also need to understand it for themselves. Appropriate policy needs to be put in place so that advertisers can manage their risk and exposure — although there is nothing in the market that can protect them 100% all the time as the Internet moves at such a pace. White and black lists will not protect a brand. Rather, viewability, bot traffic, UGC content, hidden iFrames, masked URLs, player size, inappropriate content are all things that should be considered along with price and scale.
Another barrier is organisational change. The cultural shift within the buying and selling community driven by the move to programmatic will take time to transition.
Programmatic can still form part of a media plan at an agency level, for example, rather than it being thought of as a way to bring wider efficiencies for a client though automation and optimisation across the whole schedule. On the sell-side, there is still large channel conflict between direct sales and managing yield via programmatic selling, or selling via programmatic at all. These things will take time to iron out, but will play out even more next year.
Finally, as referenced above, attribution is an area that needs to be addressed. The ‘last action wins’ model that is still the norm in digital does not reflect that video ads wield a strong influence over consumers. Rather, it rewards the high-touch channels such as search or display. It also means that many clients have a limited view of the influence of video during the road to conversion and do not understand its performance from an extended reach perspective, and this risks limiting more wide-scale investment. Therefore the ability to demonstrate the ultimate impact for a marketer is key to driving further adoption.