Allen Klosowski is a senior vice president at programmatic ad server SpotX. Based in Denver, he oversees the company’s Advanced Solutions Group, a team responsible for innovating and improving the platform. Yet for someone involved in the minute details of the tech, he’s also open...
Allen Klosowski is a senior vice president at programmatic ad server SpotX. Based in Denver, he oversees the company’s Advanced Solutions Group, a team responsible for innovating and improving the platform. Yet for someone involved in the minute details of the tech, he’s also open about the more holistic troubles this new medium has endured in getting its message across to marketers.
“There’s a lot of confusion about what addressable TV is and why we’re even talking about this,” he says. One reason, he thinks, is the overwhelming number of ways people now consume entertainment. In 2018, video can be watched via a mobile device, set-top-box, gaming console or smart television, while services range from subscription to ad-funded and even those purchased on a per-programme basis.
But, really, the message is simple: for broadcasters, it’s the potential to make more money from showing highly targeted ads to viewers, who in turn only watch commercials showcasing products and services they’re likely to be interested in. And that insight is based on data collected through sign-up as well as users’ viewing habits, location and consumer behaviour.
“This is a tool for good and not evil,” jokes Robert Aksman, who founded BrightLine, a company that specialises in creating interactive ads. “It makes TV commercials more enjoyable, which should, in turn, make them more effective for marketers. You’re decreasing the number of ads, making them less annoying and also selling them at a premium.
“For so long it was the ‘spray and pay’ method of advertising in TV but there was also so many irrelevant spots. I want to make the viewer experience better because right now we’re in the golden age of TV.”
And once the tide turns and streaming is the default method of viewing, there will be no going back. “It’s going to be jarring if I become accustomed to a personal experience and then all of a sudden I’m served up something irrelevant. Advertising can’t go back to being more frustrating.”
But first, let’s take a step back. While you’ll doubtlessly find many marketers who will define programmatic TV advertising differently, it can best be described as the ability for media buyers to utilise data to target individual viewers or households and show them different ads, as opposed to buying just the slots themselves. That’s significant because, right now, marketers can only guess how many people will watch a programme based on a previous episode’s ratings, and exactly who those people will be. It also allows for innovations such as interactive spots, AB testing and the ability for commercials to be purchased by smaller businesses currently priced out of the TV game.
Or perhaps it can even be put more simply still: it allows TV to pull off a similar trick that has seen Google and Facebook (and other so-called ‘walled-garden’ providers) dominate the industry for the last ten years – but with far more transparency. It’s a threat to the big two’s dominance you sense they still don’t see coming.
And the tech has arrived at the perfect time: streaming is transitioning from a niche concern among young people to the dominant way the average Australian watches the box: more than half of all video viewing is happening on phones, and 48% of that relates to footage that’s five minutes or longer. Aussies are streaming between 40–50 million minutes of TV a day and broadcasters are upping their game in collecting information on their customers. Just last month, Ten announced a 58% annual increase in streaming with 265m individual clip views.
“We’ve reached a tipping point where you can’t ignore it,” says Aksman. “Those who buried their heads in the sand will lose their jobs because they’re missing an entire audience. TV and digital teams are being mashed together and that’s helping the industry move forwards.”
“TV is a $4.2bn market in Australia now,” concurs Klosowski. “There’s 11M OTT viewers, 20M broadcast signals and 2.5M are now watching on HbbTV free-to-air where you can do personalised advertising.”
Moreover, many of the initial problems with programmatic technology – or, at least, perceived issues – are being ironed out and addressed. Now, new platforms mean that despite buying viewers as well as inventory, marketers have control over what programmes their ads appear within. That could be something as severe as preventing a kids’ ad landing during an adult programme, or simply to prevent two similar spots appearing in the same break. Platforms such as SpotX have gone one step further in bridging the gap between buyer and seller by letting them combine viewer information anonymously.
Why then, has uptake been slow among the big beasts of the television world?
“For some, there’s the perception that it’s just not TV,” explains Klosowski. “But it’s still TV even if it’s not delivered via an antenna or cable.” The problem, he thinks, is that some digital buyers don’t get the TV side yet while the TV execs don’t understand digital.
“The internet is struggling to find uniformity,” he adds. “Soon, mobile, desktop and traditional TV will merge into one experience, and marketers will plan across all of these devices as if they have equal value.”
Here, Mumbrella and SpotX outline programmatic TV’s key innovations:
Using data for smarter targeting
“Adverts are geo-addressable,” says Aksman, “which means we can detect where viewers live. We did an overlay for Benjamin Moore paints – which isn’t sold in many places – that displayed the three closest hardware stores where viewers could buy a tin. That solved a major problem for them.”
It’s not just about directing users to a local store. Deals can be localised if prices vary across the country. It means creative agencies could produce one big national campaign, but then simultaneously tailor it to different segments of their audience. And that can happen in real-time. An allergy prevention brand could incorporate a pollen forecast into its commercial; a sun-tan lotion company could highlight a higher UV index.
Data can be used in other ways. For instance, for the first time, marketers can now use retargeting or positive and negative targeting. “You can say, ‘OK, we’re going to focus this campaign to people who have already seen this advert before,’” says Klosowski. “Or, similarly, you can home in on those who didn’t watch it last week. You can use data for reinforcement that makes campaigns more effective.”
But here’s the clever bit: advertisers can do this even if a viewer switches to less popular programming in one viewing session. Moreover, it can do that regardless, or because of, device used. “Seven or Nine could look at real-time insights and create a graph of all of the devices used in the home and work out whether to positively or negatively target those other devices based on that ability,” he adds.
The point is not just that it lets adverts be more defined, but to combine that with the buzz of a programme. Marketers can now make their Melbourne Cup commercials more effective but still retain the excitement of being part of a huge sporting moment.
Testing for effectiveness
Programmatic means marketers can test out an advert’s effectiveness to a smaller group in different demographics – through initiatives such as AB testing – before rolling out a larger campaign to a mass audience. Then they can nip and tuck while it’s in full swing. Compare that to today, where brands spend millions on ads and placement with little-or-no idea of how successful it will be until it’s too late.
There’s then the potential for every single component of a TV advertisement to be measured by its impact, meaning that relatively cheap edits and adjustments could significantly improve a commercial’s performance. In future, creative teams and media agencies might collaborate to make that happen.
It works both ways because broadcasters can benefit, too, by finding out if they are underselling certain elements of their audience. They’ll be able to see if demand for a particular sector is greater than they first thought.
“It’s where advertisers want to go,” says Klosowski. “Large retail chains might have loyalty programmes and that’s going to start feeding their TV buys and where they can start closing the loop.”
Opening up TV to smaller businesses and broadcasters
“An advertiser who goes on Facebook and Google can hit a very specific segment on a small budget,” explains Klosowski. “That’s interesting to regional businesses who don’t have the money for bigger campaigns and only want to buy users who are relevant.”
With TV now able to target similar smaller segments, it opens up the TV market to a whole category of buyer who previously never existed. And more potential advertisers equal a bigger yield for broadcasters, while new tech equates to lower costs. “Before you couldn’t have a sales team servicing every small advertiser, but now you can blend traditional and programmatic to help them.”
And it also provides the potential to change how TV shows are commissioned. Today, senior execs are desperate for a monster hit and fear programmes underperforming. Whereas in the future, with marketers buying individual viewers, they can celebrate their lower-rated niche shows knowing their slots can be sold off at a good price, and not siphoned off as remnant inventory with no rating guarantees. The benefit for the viewer? Without the crippling pressure of individual ratings, traditional channels will be able to commission more experimental shows – much like subscription rivals such as Netflix and Stan.
On older ad serving platforms, live sport presented a problem for programmatic. If the ball goes out of play, for instance, ads must be loaded up and ready to go if there’s a pause in play. In 2018 however, platforms do all the work beforehand.
“That means a brand is connected to thousands of buyers and we work with our partners to make sure the ad decisions are made prior to the break,” says Klosowski. “Then we can do some cool stuff like vary the length of the break or change the ad.
“You could have different advertising if the pause was caused by a penalty kick.”
And that fantasy has already started to become reality in Australia. In October last year, Seven ran addressable commercials during the Rugby League World Cup, with prestige clients including Coles, Telstra and McDonald’s, while early versions of the software let it target audiences by behaviour, location, age and gender. And in January, it followed that up by introducing the tech into the Australian Open.
Data collection and sharing
Unlike traditional desktop websites that collect cookies, broadcasters can gather authenticated subscriber data instead. They can ask viewers to fill in surveys on sign-up and then build up a user’s profile through third-party data and also the programmes they watch. At a base level, it’s useful to know if someone is constantly watching finance programmes, but they can delve deeper to deduce when and how those users are being targeted. They could then, for example, make sure that after three viewings of the same ad, a slightly different version is shown, something that prevents a spot becoming so ingrained in a viewer’s head that it’s background noise.
It also allows data from the broadcaster and advertiser to be shared anonymously. “Say I’m a major broadcaster,” explains Klosowski. “The last thing I want is for my viewer to be targeted by an advertiser and then for that advertiser to target that same user on a rival network at a cheaper rate. In that case, it’s not worth trading programmatically. But then if you’re not trading programmatically, you’re losing out on all the perks.
“We identified a need. Now an auto manufacturer can give data to a broadcaster, but the broadcaster can’t see exactly what’s in it. But the broadcaster can still send the advertiser opportunities to bid that match this segment in our inventory that you gave us. Nothing leaks out so it’s a win-win for both sides.”
The ability to minimise delays and lag
If you’ve ever had to endure a delay to the start of a stream, or had your mobile phone screen black out completely, chances are it was caused by a programmatic ad serving platform designed for flat, 2D websites. It happens because most systems use a so-called “waterfall” system to choose which advertiser gets to run their commercial. Essentially, the spot gets offered to what the broadcaster assumes is the most valuable bidder, and if they don’t bite, goes to the second most valuable and so-on. Of course, if a few don’t opt in, the viewer has quite the delay to endure. And, perversely, if the user gets lucky, it could be the broadcaster who loses out – it’s not uncommon for a marketer lower down the pecking order to actually be willing to spend the most money.
“The tech can’t search the options quick enough,” explains Klosowski. “If each potential buyer is given half a second to make up its mind, but ten of them say no, then you’ve got a five-second delay.”
That delay is irrelevant on a normal web page because the content isn’t delayed, but the pain is passed directly onto the viewer if it’s a video-only stream. Today, though, new platforms have evolved that let broadcasters pitch their slots to multiple advertisers simultaneously – allowing for a better yield for media owners and a painless watch for viewers.
“Traditionally, an ad server would have made one decision about one ad, stuck it in that stream, everyone would have seen it, and we would have had to use Nielsen or OzTAM to measure the audience. Now we’re seeing a million different data signals and making a million different decisions simultaneously. Now let’s say we’ve expanded to a much larger number of advertisers, now its hundreds of ad decisions, based on millions of data points at the same time.
“Our system of trading is completely parallel. Every buyer sees every opportunity at the same time – meaning a bigger yield for the publisher and less latency. The entire process takes less than half a second.”
Ads that are completely interactive
“Historically, TV advertising has been an awareness vehicle,” says Aksman, “but now we’re adding digital engagement to the biggest screen in your home. And we know that interaction on a TV leads to more purchases and brand affinity than on a smaller screen.”
Aksman founded BrightLine to enable advertisers and creatives to do much more than simply play a straight, 30-second ad, and already there is a variety of different options.
One format is click to full screen, where viewers can pause the TV show to be taken to a larger experience. Conversely, in-stream interactivity allows viewers to play around with the spot while the TV continues to run in real time. “BMW ran an overlay that was a car colouriser,” says Aksman. “You clicked left and right to change the paintwork and they even threw in a rotater to spin the car around. Afterwards, they asked those watching whether they wanted to drive it off-road or in the city, so it was an intelligence gathering tool, too.”
The interactivity can work with data and in real time. For instance, a product slideshow could change depending on what offers the company was running that month, while there is the potential to show different adverts for the same product to different viewers.
“If it’s a car advert, why not focus on its easy access to the back seat if the viewer has kids?” says Klosowski.
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