Stations Cautious In Adopting Programmatic

When WideOrbit announced the launch of its programmatic selling platform for spot TV sales in October 2014, media buyer Janice Finkel-Greene was an enthusiastic supporter.

“It is an opportunity to better serve our clients by replacing legacy conventions with modern, performance-based metrics,” said Finkel-Greene, EVP of buying analytics at Magna Global.

A year later, she remains bullish. “I don’t know any [supply-side programmatic platform for spot TV] we haven’t talked to or been willing to test. Who wouldn’t?” she says.

But, she adds, progress has been slow because of broadcasters’ unwillingness to let go of “legacy conventions.”

“It’s so important to think of it as something new, and something that doesn’t need to be retrofitted into an old business model.”

The broadcasters’ principal concerns are distilled in a nine-page document entitled Broadcast Linear Television Programmatic Guidelines and Best Practices. It was written by a number of leading non-network TV stations groups as well as the two spot TV rep firms — Cox Reps and Katz TV Group — to spur the development of acceptable platforms.

The guidelines, which are available for review and comment on the TVB website, tvb.org, stem from the broadcasters’ desire to simplify the transaction process and generate more sophisticated audience data for buyers, while preserving their ability to set and negotiate pricing.

The concerns are valid, but they have tended to slow the rollout of workable programmatic supply-side platforms (SSPs), despite the high levels of interest among ad buyers and sellers.

“We’re not even to first base yet,” says Val Napolitano, EVP of programmatic at Hubbard Broadcasting. “A lot of companies are emerging into the space from both the demand and the supply sides. Right now we’re in an exploratory stage.”

The leading SSPs — Videa and WO Programmatic TV — are still nascent, looking to lead and follow the wishes of broadcasters at the same time. None engage in real-time bidding — the auction environment that many station execs fear will lead to commoditized pricing.

Spawned by Cox Media, Videa had hoped to launch last summer, but it now says it will not get going nationally until the middle of this year, although some selected markets could come online in the first quarter.

“We spent the better part of [2015] pivoting and incorporating a lot of the learnings that came out of that beta period,” says Videa President Shereta Williams.

So far, Videa has attracted three media buyers — Carat, its new-business unit Amplifi and Starcom — and at least six station groups in addition to Cox and Cox Reps — Tegna, Graham, Raycom, Hearst, Media General and Scripps.

“We realized that the plumbing for a supply-side platform is not the hard part — the connections to the suppliers and the buyers,” Williams says. “The hard part is the data. The traffic data that exists in TV stations is pretty varied and very disaggregated. And it differs literally from station to station — advertiser names, program names, priority codes.

“The ability to standardize all that data is the heavy lift of what we’ve done [in 2015],” she says.

The other major supply-side platform is WO Programmatic TV, sprung from the hip of WideOrbit and its traffic system. In addition to Magna Global, it has a strategic partner in Tribune Media.

According to WideOrbit CEO Eric Mathewson, the platform has attracted several other leading station groups, including Hearst, Raycom, Meredith, Scripps, Sinclair, Gray and Entravision. That translates to about 500 stations covering three-quarters of the nation’s TV homes.

WO is tied in with several demand-side platforms, including TubeMogul, The Trade Desk, Mdotm, Wywy and Eyeview Digital, Mathewson says. And through them, WO clients can transact business with the major media agencies.

Despite all the interest, Mathewson says broadcasters remain wary of programmatic solutions. “There’s a logical concern about whether the business coming over the programmatic pipe is additive or dilutive to their existing manually negotiated transactions.”

In other words, he says, the stations question whether they are going to attract extra business via programmatic or are they going to do the same business that their account executives are now bringing in on their own.

Mathewson believes the concern is unfounded. “To date, we have seen the vast majority of the order volume being additive to current direct sales channels. All programmatic orders are compared to existing orders on books, and the station or network sales management chooses to ‘harvest’ the orders that are additive to existing price and inventory levels.”

Also holding back programmatic development is lack of full participation among the major media agencies.

“The biggest challenge is in the buying community — getting them to engage and trust that it’s a process that will work,” says Paul McTear, president of Raycom Media, which has tested the Videa and WO platforms.

The next thing that needs to be done — “and it’s an absolute prerequisite for it to be successful” — involves paperwork, McTear says.

If Videa has 100 stations under contract for a transaction, he says, “the critical piece is for Videa to turn out one invoice for all 100 TV stations.”

Finkel-Greene cites another problem: insufficient information on how the platforms are calculating audience delivery and guarantees. “We may want to, as an industry, institute some best practices on how those calculations should be done.”

Finkel-Greene is also looking forward to the day when the SSPs provide more “sophisticated modeling and optimization” of a buy in real time, while a campaign is running.

“We need to reevaluate the value proposition as it stands now. Nielsen is instituting a new ratings methodology, which is meant to fill in [information about] audiences that we’re not capturing right now,” she says.

In the future, there will also be more markets with immediate measurement information, “so we don’t need to wait three to five weeks to see the results,” Finkel-Greene says. That will allow for “more timely alterations and enhancements to our buys.”

Some sellers share that concern. “The platforms will be very valuable assets if you can have behavioral data matched up with viewing patterns — really targeting a specific audience you want to reach, whether it’s a car buyer or restaurant consumer or anything of that nature,” says Hubbard’s Napolitano.

Aware of the problem, Videa’s Williams promises that by mid-2016, her platform should have consumer-buying data from three or four different research providers, in addition to the Nielsen and Rentrak data it has now.

“With spot TV flattening out and spreading out amongst other media, we’re having to look for other sources [of revenue], says Jim White, VP-GM of Bahakel Communications’ WCCB Charlotte, N.C., which recently started using WO.

The interest is matched on the buy side. Matt Bayer, SVP of advanced TV at the agency IPG MediaBrand, says that it’s all a matter of time. “Using technology and data to complement spot television will accelerate really quickly.”

This story originally appeared in TVNewsCheck’s Executive Outlook, a print publication devoted to the future of broadcasting. Subscribe here. Read the other stories in the Winter 2016 issue here.