Programmatic Challenges Covered at Video Ad Summit2 Jul, 2014 By: Doug McPherson
NEW YORK – Online video giant Hulu said at last week’s VideoNuze’s Online Video Advertising Summit it is open to programmatic buys.
“Programmatic is what people want to embrace – if it is worth the effort in terms of pay-out on the buy side and the sell side,” said Peter Naylor, senior vice president of advertising sales for Hulu. “We are happy to do preferred, guaranteed deals on a private reserve basis. We are not talking open exchange, RTB (real-time bidding).”
More than 300 leaders from the digital video and TV industry discussed challenges related to programmatic buys at the conference.
Kelly Liyakasa, a writer with AdExchanger.com, says brands and publishers are well aware of the growing popularity of applying programmatic to direct buys. “Hulu for instance has reportedly beta-tested a programmatic exchange for more than a year,” she says.
Liyakasa says as programmatic direct deals from big-name brand advertisers propagate, it’s still unclear how marketers will draw budget to fund the efforts. Most money still goes to more traditional channels like broadcast and even print.
David Hallerman, principal analyst for eMarketer, said at the conference there’s “a small shift from TV [budget] but … print is still way over-indexed and brands are still putting money in it.” Print, Hallerman said, offers a very good sense of the audience, and if audiences can be reached more effectively via programmatic direct, then dollars will shift more readily.
Alternatively, some markets will transact only programmatically, said Fred Santarpia, Condé Nast Entertainment’s executive vice president and chief digital officer. “The challenge is that so much of our business [hinges upon] RFPs, etc., and we’re not sure programmatic is something that will drive a return for us in the short-term.”
Doug Knopper, cofounder and co-CEO of FreeWheel, a sell-side digital video and TV tech company that helps major broadcasters monetize their inventory, said before broadcasters commit to programmatic, they must have answers to questions around brand safety (ensuring for instance a Chevy ad doesn’t follow a Budweiser ad), measurement challenges and how to reconcile new processes with long-lived TV workflow rules.
Liyakasa says there’s also discrepancy around how buys are structured. Hulu, for example, has both original programs (and counts more than 6 million Hulu Plus subscribers) and established TV shows. Yet, Naylor said it sells inventory around audiences, not around specific shows.
“There are so many ways to reach your target by genre, audience, demographic. When we’re talking about audience, they are materially younger than the average of TV audience and we decided two years ago we’d only charge for video ads that are completed,” Naylor said.
Condé Nast, the 100-year-old print company, sells ads around audiences as well as individual brands like Vogue or Bon Appétit. “Video opens up a whole new set of opportunities,” said Santarpia. “We focus on audience, yes, but we also look at brand and show specifics. It’s more than just media. We want to look at creative executions for brand partners that weren’t possible [in print].”