Making Automated Convergence A Reality

How can the traditional broadcast business model advance to increase opportunities, stay competitive and deliver a more automated buy/sell experience? That is a question keeping some media executives awake at night.

The answer? Reduce friction between supply and demand via automated convergence to increase the speed from prospect to cash and attain improved operational efficiency. It seems easy enough, but the challenge is how this goal can be achieved in an industry where antiquated systems are inhibiting growth.

Media ad buyers want the ability to buy linear TV advertising in the same way they do digital for obvious reasons. It’s an easier process, they can hyper target, it provides a simpler reconciliation process and greater sense of control and they get both measurement and predictive analytics.

The challenge for traditional linear TV going up against this process is that many broadcasters’ operations are embedded with legacy systems that not only constrict the real-time flow and action of data, but weigh down the opportunity for the workflow to evolve to a simpler yet more advanced model.

While broadcasters are aware of the need to rise with the times, they must combat outdated infrastructures that limit their ability to add functionality and integrations. Even if technology companies develop a solution that could be adapted, their inferior internal systems significantly hamper the operations’ adeptness to scale for future growth.

Not only are these legacy systems and technology limitations holding broadcasters back, but new larger tech companies have entered the market from longtail vantage points, disrupting the traditional model and stealing away traditional ad dollars.

A great example of this is NFL football games streaming on Amazon Prime. Advertisers want to capitalize on premium live sporting event inventory so when they see it added to Amazon’s already robust audience data, on top of their desire to hyper target, they feel they no longer need to rely on traditional broadcasters and see Amazon as the more desirable advertising platform.

These obstacles have left broadcasters with a choice: They can start taking calculated risks, betting on strategies that hold a high potential of significant growth to move forward balanced with a probability of loss. Or they can play it safe, staying comfortable in a profitable, yet fading, business model as the industry shifts beneath their feet.

Today, broadcasters still have far more reach and opportunity to deliver a higher value than that of the market-disrupting technology companies. But this is dependent on both the buy and sell sides working equally to elevate the traditional methods previously used to conduct business.

Here is where the convergence piece comes into play. Convergence does not simply mean things coming together. It’s about various participants and factors coming together — in a synchronized fashion — to achieve a common end goal.

Convergence means the buy and sell sides of the industry work in tandem to deliver on the premise of making a linear TV buy like that of a digital buy; providing dynamic ad insertion and delivering ads on time-shifted media. Also, it means tapping the ad server to produce quantifiable metrics for ad runs. The key to each of these parts successfully happening is automation.

Development is already underway to evolve to more automated solution sets. The mainstay to deliver dynamic ad insertion on linear mediums will shift to the forefront, ad delivery will be via an ad server and spot TV will be reserved for premium content.

Dynamic ad insertion will be designed for call-to-action marketing, while spot TV will be the focus for branding. Invoicing will be handled via accounting software due to buys encompassing multiple media segments that involve reconciliation across multiple vectors. The traffic process as we know it today will become significantly simpler as makegood negotiations will be pre-determined and/or diminish altogether.

The appropriate front-end technology critical to stimulate the automated, converged workflow process and make all of these pieces work harmoniously is neither a cheap nor fast process to develop. That said, it is also possible to automate flow of the process from prospect ingestion to inventory review and optimization through proposal creation and negotiations, then finally to execution, revenue recognition and analysis. But that will take time.

Having broadcasters as open minded and willing partners in this process will help technology companies develop the appropriate solutions on a faster timeline, helping everyone to win sooner.

Broadcasters and technology companies need to work hand in hand and commit to development, feedback and updates in order to produce a successful final product that will achieve the specific goals needed. Without broadcaster involvement, the solutions needed will still be built, though the successful end result will take much longer to arrive at and will require a higher monetary investment from the broadcasters. At that point, that’s an investment they would need to make in order to stay relevant in the shifting industry.

Automation is a necessity to elevate the industry’s future. Moving beyond legacy systems to more automated convergence and workflows will enable broadcasters to maintain the value they deliver to their audiences today before it becomes obsolete.

Mark Gorman is CEO of Matrix Solutions.