Keeping pace with programmatic: Ooyala’s Scott Braley explains how broadcasters and publishers can monetise better
Programmatic trading is fast overhauling the online video advertising market. According to SpotX, 23 per cent of the UK’s video ads were programmatic last year. By 2020, this figure is forecast to reach 60 per cent.
Better access to consumer data is allowing brands and their agencies to choose impressions more carefully and bid in real-time to reach those people who are most likely to buy their product.
The problem is that publishers and broadcasters sell some of their advertising space – or inventory – directly to brands or agencies using an ad server, while inventory sold programmatically through auctions and private marketplaces is done through a supply-side platform.
“The two don’t talk to each other very well,” says Scott Braley, general man ager of ad tech at online video platform provider Ooyala. A former head of US sales at Facebook Atlas, the network’s ad serving and measurement platform, he thinks that broadcasters and publishers should adapt now to avoid losing out on revenues.
He is developing a platform which will integrate the ad server which broadcasters use to manage direct deals, and the supply-side platform through which they make inventory available for purchase programmatically, so that brands and agencies bidding directly or programmatically are in closer competition with each other. It’s a move which he believes will help publishers drive up ad revenues.
Why do publishers need to adapt?
Recent trends in video show that the biggest portion of premium video supply is sold directly, which means that it is usually managed in a buyers’ ad server, not the demand or supply-side platforms which are used to transact programmatically. But buyers are increasingly interested in bidding in real time because they can use their wealth of first party data to make smart buying decisions on a spot basis. If this predilection for real-time bidding continues, publishers are going to need to incorporate this capability for when budget allocations shift. It’s a way for publishers and broadcasters to future-proof their monetisation strategies.
Publishers have a certain amount of predicted inventory and their sales team will go out and try to sell as much of it as possible for the highest price. But not all advertisers want to spend their entire budgets up-front because they don’t know whether the relative cost of media is going to rise or fall depending on the scarcity of supply. And they want to remain flexible so that they can take advantage of shifting trends or promotional needs throughout the year. It was the same with TV 50 years ago.
There are other factors outside publishers’ line of visibility, like when a new iPhone will be released, which could bring with it an increase in marketing budgets.
They need the tools to better predict their indirect sales, and have a platform which can use that information to better inform their direct sales deals with brands and agencies.
Are intermediaries like Facebook, Google and AOL preventing this?
A large entity like Facebook or Google provides a lot of short-term value to publishers and brands. If you’re a publisher with content to monetise this quarter, they will probably do a good job. The question is whether they are motivated in the long term by enabling you to capture as much revenue as possible, or in their own ecosystem.
There is an increasing desire in the industry to understand what the intermediaries between the media dollar and the inventory do with that money. On average, for every dollar spent on media, about 55 cents finds its way to the publisher. When you have a player in the middle, you should question where they are creating value, whether it is long or short-term, and who they are really interested in supporting. That’s why we’re building a solution to maximise the publisher’s interests on the sell side.