Engineers and business execs agree that the technology used to automate the buying of spots by ad agencies — still has a long way to go in trying to level the playing field with broadcasters’ more nimble digital competitors.
LAS VEGAS — In a television industry that is rapidly adopting IP networking and replacing traditional hardware with virtualized workflows, the technology used to buy advertising remains woefully outdated, said top broadcast executives speaking Sunday at the Devoncroft Summit in Las Vegas.
In separate panels featuring top engineers and business executives discussing technology trends, a common theme was that ad tech — the generic term used to describe the technology used to automate the buying of spots by ad agencies — still has a long way to go in trying to level the playing field with broadcasters’ more nimble digital competitors.
Broadcasters’ problem with advertising technology starts with its audience measurement tools and extends all the way through to the ad-buying process, said Del Parks, chief technology officer of Sinclair Broadcast Group. Parks was part of the panel “Strategic Drivers of Media Technology Investment,” moderated by Devoncroft Partners founder Joe Zaller.
“It’s almost a tale of two cities,” said Parks. “There’s almost an abundance [of measurement and reporting] on the digital side, and on the other side you have this archaic old system in Nielsen. I just go right to where the money is, and it’s with advertisers. If you follow the technology chain, it doesn’t start with us, it starts with the advertising agencies, and all of those systems are archaic. Ad tech is a crucial part of what needs to change in our industry.”
The problem isn’t limited to the local station side, said Richard Friedel, EVP and general manager of Fox Networks engineering and operations.
“Trying to get a modern system to efficiently sell across all the different distribution platforms is a huge challenge now,” said Friedel. “It’s a huge industry problem.”
“It’s a problem on a global basis,” added John Honeycutt, chief technology officer of Discovery Communications.
Sinclair, which views targeted advertising as a big opportunity in the new ATSC 3.0 broadcast standard, is tackling the problem as a member of the TV interface Practices (TIP) initiative along with Tegna, Nexstar and Tribune (which Sinclair is in the process of acquiring). Parks said the major goal of TIP, which is developing a common application programming interface (API) to let buying and selling systems better communicate, is to “stop trying to be the United Nations and speak 50 different languages with interpreters.”
Parks pointed to a lack of standards in ad-buying software and said the technology was outdated in a broadcast world that is increasingly taking advantage of remote workflows and cloud-based content preparation and distribution.
“There are no standards in the advertising business,” said Parks. “It’s whatever vendors build, and have built for 30 years. People talk about a cloud — we’re still trading faxes and PDFs. It’s insanity.”
Parks’ sentiments were echoed by business executives in the panel “The Future of Television, Challenges and Opportunities,” moderated by TVNewsCheck Editor Harry Jessell.
Kevin Latek, EVP and Chief Legal and Development Officer at Gray Television, said that broadcasters needed to work with advertisers to streamline the national spot buying process. “It should be just as easy to buy time on TV as any other platform,” he said.
Broadcasters have been complaining about the spot buying process for several years with little progress, noted Jessell, who asked, “What’s the big hangup?”
Steve Pruett, EVP and Chief Development Officer of Sinclair Broadcast Group, said that getting a standard adopted across agencies was difficult.
“There are four holding companies, all with slightly different approaches, and many local agencies,” Pruett said.
Brian Lawlor, president of local media for E.W. Scripps, said that he doesn’t know if there’s any single entity to blame for the delay. “We have a lot of different broadcasters who built [systems] on different technology vendors, and agencies have built on different systems as well,” he said. “You’ve got four or five systems in place.”
That said, Lawlor said there has been significant progress in automating spot buying. He said that automation needs to get completed first before broadcasters can really exploit programmatic advertising.
“2018 will be the year that automation moves to the next step, when national agencies define a system to buy local markets on an automated basis,” he said.
Read all of TVNewsCheck‘s NAB 2018 news here.