Automated & programmatic marketing An egta publication on data-driven advertising sales for television & radio

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1 Automated & programmatic marketing An egta publication on data-driven advertising sales for television & radio

2 abstract egta the organisation representing the leading television and radio broadcasters and their advertising sales operations throughout Europe and beyond is pleased to announce its publication on Automated & Programmatic Marketing. Does the rise of programmatic marketing signal the end of person-to-person advertising sales? Is the term programmatic even applicable to linear television and radio advertising? How quickly will automation transform the broadcast industry? Most importantly, how are the early innovators actually leveraging the advantages of rich data sources and automated trading technologies today? egta s new publication explores automated and programmatic marketing from the perspective of television and radio broadcasters and their sales organisations. It is the first report of its kind to draw on the experience of innovators in the US and Europe, offering practical examples of how automated and programmatic trading can be applied to audio and video advertising, whether delivered by broadcast or online. This essential guide examines the different forms of automated trading, from programmatic direct to real-time bidding (RTB), and the market factors influencing the rapid development of new ways to discover audiences, buy and sell airtime and analyse campaign impact. The report also includes an overview of the issues around data collection and management, legal considerations and fraud. A series of interviews and case studies with leading experts in the field deliver invaluable insights from the vanguard of this quickly developing marketing environment. These views from the industry offer practical advice for organisations considering a move into programmatic and most importantly advice on how to achieve success. Copies of this publication are exclusively available to egta members free of charge. Please write to egta at to request as many copies as you require for you and for your team (up to 10). egta asks that you cover the cost of mailing this package to your company. Please either provide us details of your account with your shipping provider (e.g. DHL, FedEx, TNT, etc.) or your accounting particulars for invoicing. 2

3 executive summary This publication has two objectives: firstly, to analyse the environment in which programmatic trading has developed as a powerful marketing concept; and secondly, to provide insights on how broadcasters may apply the underlying principles of programmatic to radio and television, delivered by both linear and non-linear means. Programmatic marketing applies data-driven audience insights and automated processing to advertising campaigns. Whilst it is characterised by machine-to-machine engagement in one or more elements of the campaign workflow, it does not necessarily involve the open marketplace auctions most associated with real-time bidding (RTB). Broadcasters seeking to take advantage of new data sources and technical solutions for audience discovery and inventory yield optimisation are building on the close relationships they enjoy with advertisers and agencies to develop private marketplaces and other environments in which they can transact with mutually beneficial results. The inventory sold by broadcasters around their content both through linear television and radio delivered by DTT, cable, satellite, IPTV, FM, DAB etc. or via on-demand services is markedly different from the online display inventory that is increasingly being sold through programmatic channels. Programmatic presents different solutions for broadcasters and publishers originating from the online environment, and its application is therefore being adapted to suit each media channel. Broadcasters are finding new ways to discover their audiences by applying new data sets, and they are also developing ways to increase their own workflow efficiencies. However, programmatic trading is to a large degree being driven by the buy-side, which is seeking to bring the most advantageous capabilities of digital marketing to its entire media ecosystem. Major agencies are therefore predicting ever higher percentages of their transactions will be through programmatic buying channels and advertisers themselves are seeking innovative ways to do business has seen many European television and radio broadcasters enter the programmatic space with portions of their online inventories. This is a logical first step into automated and data-driven marketing, as the measurement and trading infrastructures are not dissimilar to those of the online environment. Their counterparts in the US, on the other hand, have started to develop solutions to deliver programmatic advertising within their linear content that reaches many millions of viewers and listeners every day, by breaking down the traditional advertising workflow and applying data and automation at each stage. The second part of this publication looks at the practical application of programmatic techniques to the inventory of broadcasters from both the US and Europe.

4 table of contents 05 Editorial 09 Executive summary 13 Introduction 14 PART A: egta s guide to programmatic marketing 16 CHAPTER 01: Defining programmatic trading and marketing 24 CHAPTER 02: Factors driving the development of programmatic beyond online display 36 CHAPTER 03: Overview of approaches to programmatic marketing currently being developed or employed by television and radio companies 48 CHAPTER 04: Data and targeting 58 CHAPTER 05: Legal issues, fraud and viewability in online advertising 68 CHAPTER 06: Programmatic for broadcasters: Factors for success and pitfalls to avoid 68 PART B: Views from the industry 71 Cablevision 75 Jelli 81 Simulmedia 85 RMS 88 Videoplaza, an Ooyala company 89 RTL Nederland 92 WideOrbit 94 FAR Partners 96 MTGx 99 VivaKi 102 RTÉ 107 Glossary 111 Bibliography 114 Acknowledgements

5 I don t just mean technology and data. Actually, the more important learning from online is that proextract from the book case #08 Henry Rowe (Partner and Founder, FaR Partners) egta: To what extent are all media becoming programmatic? Henry Rowe (HR): It s a done deal. Standard media space will be traded in an automated way. Now that is a given, what is much more important is to understand how to exploit the opportunities that automation brings. Don t worry! While the changes in the market are profound, our Media Owner Tracker data shows us that less than 10% of all media and direct marketing is currently traded programmatically. Online display is generally over 50% programmatic but the vast majority of TV, radio, out of home, print and direct marketing is not. Our Industry Panel data estimates that the percentage of TV and radio that will be traded programmatically by 2017 ranges between 30% and 60%. In other words, the biggest change is yet to come. egta: What can the TV and radio industries learn from online s move to programmatic? HR: The great advantage that TV and radio have is that they can learn from online s mistakes! We have some clear recommendations for those industries: Create a transparent operating model: Ultimately, all advertising needs client trust. When building a programmatic marketplace for TV and radio, make sure it is built on a model of transparency. Start with the good stuff: Web and mobile programmatic suffered an image crisis early on because it was, in the main, a solution to a remnant/unsold problem. Getting the market to really view it as a viable premium solution has taken years. When moving to an automated model, make sure you follow the financial and commodities market and start with the premium inventory. (They don t call it the FTSE 100,000. It s the FTSE 100 for a reason!) Don t discount price because it s programmatic If you start with the premium inventory, you can start with premium pricing. Online started at the bottom and this hit revenue hard, but importantly it also damaged the perception of their brands. Exploit scarcity Online (in the vast majority of cases) does not have scarcity. Supply exceeds demand and buyers can always go elsewhere. When moving to automation, identify your scarce (for scarce read valuable) inventory and identify the buyers who need it the most. Get them into a private auction and allow them to bid against each other for your most important space. Smart trading strategies can hugely improve yields. Value environment Audience targeting in online has proven to be an incredibly popular strategy why target content as a proxy for a person, when you can use data to target the person instead? But the downside of this targeting is that the power of the media owner brand and the quality of their environment can be lost in translation. If you don t place a value on your environment/content, then you are selling a commoditised audience like everyone else. From that point, prices only go one way. Create live and actionable data Online media has great data and measurement systems. But programmatic can breed walled gardens and this creates fragmented data. If the buyer does not have a single customer view, then effective optimisation can become guess-work. TV and radio can learn from the need for a more unified view of each campaign, as better insights will lead to greater investment. Value data and media This is a quick one never let your media and your data be separated, unless you have a clear business reason to do so. Buying models The online RTB ecosystem generally encourages a second price auction. This led to lower yields for publishers and people gaming the system from both sides. TV and radio can take this learning and create value-based models from the outset. Standardisation increases revenue Online programmatic is attractive because a buyer can target any audience, such as Car Buyers. The problem is, most media owners disagree on how to define a Car Buyer! TV and radio businesses have traditionally been strong at standardisation of audiences, and this should be brought into the programmatic world from the beginning. Get ready for radical skills changes FaR Partners is a datadriven commercial consultancy for media owners. We benchmark performance, we open new revenue streams and we implement solutions, across programmatic, video, mobile, data and content 8 9

6 grammatic is not a single skill-set, and the difference between selling fast-paced daily bidding vs. longer-term brand building is significant. Make some friends The recent premium publisher alliances (e.g. Pangaea) took years to get live. Content-driven publishers lack the scale of the Googles and the Facebooks. From the outset, assess whether there are mutually beneficial partnerships that will help you compete against the scale players. Own your market operations Don t let a large global digital media and tech business own your exchanges, your data or your market. Create and own the ecosystem you plan to work in. Finally - Simplify your stack If there is one thing an online media owner will tell you about programmatic, it s that there are too many vendors with the best technology in the market. Choose well and use the minimum number of vendors

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