Media Technology

So, we finally “cut the cord”. We had the full MVPD package with HBO, Showtime, STARZ, you name it we had it. All because I am addicted to NFL Redzone during fantasy football season and the provider (FIOS) only includes it with the premium package. Then one late summer morning we got “the letter”, informing us that HBO and Showtime were being removed from our package, and if we wanted to continue using them we could do so at an additional fee. Coincidentally, this communication came just days after the AT&T/Time Warner deal was approved.

I was livid. This was the final straw.

So, I called the provider to discuss the situation, and after two conversations, resulting in two different price quotes that increased my costs by 25% and 40% respectively, I told them: “Terminate my service. Tell me where to dump your equipment.”

I had done some research on OTT/CTV (same thing) and decided that Direct TV Now looked like the best fit. They were giving away an Apple TV if you signed up for 3 months. I already had a Roku box and a first gen Apple TV so I was all set. Or so I thought.

I’d watched Netflix on my Roku devices and had a decent experience, so I was not prepared for the drama of using OTT only… whoa. One word: buffering…

My first reaction was “the #&@%$$ MVPD is throttling the connection! That sucks!” After I calmed down, I actually paid attention to the modal message on the screen: “your network connection is underperforming….” Oh, maybe it’s the WiFi. One quick Target run later (lucky for me there is one literally around the corner) and I had a Netgear WiFi extender setup. Better, but still occasional buffering.

Because I have both a Roku and Apple TV, I switched back and forth between them to see if there was any performance difference. Negligible. But the user experience on the Apple TV, as you might expect, is vastly superior. Love that box. Interestingly, Netflix performs noticeably better than Direct TV Now on either device. I guess the death of net neutrality is showing its effects…

What about the ads? (after all this is the Advertising Perspectives blog…). Well, it’s interesting. Direct TV Now has a “Cloud DVR” feature. You can browse content by network and choose from a selection of on demand content. From this interface you can also record series. The “recorded” content works just like a hardware DVR. You can rewind and fast forward (skipping commercials). However, after a while, I found there was no need for me to record my favorite shows because they were (mostly) available on demand anyway.

On the flip side, live programming cannot be fast forwarded. You. Have. To. Watch. Commercials. All of them. Interestingly, everytime you switch to a different channel a new ad pod starts before the content plays.

So after about two months of OTT only I’ve come to these conclusions:

1. The OTT user experience needs improvement to be on par with traditional MVPD products.
2. Ethernet connections to the OTT/CTV hardware may be required for the best performance.
3. My iPhone or iPad on AirPlay to the Apple TV actually works more reliably than the Apple TV or Roku on WiFi.
4. You will see more ads.
5. The ad targeting is interesting, and sometimes uncannily accurate. I saw different ad loads, on the same content, depending on the device.
6. Unbelievably, there are empty ad pods, even on premium networks (ESPN Sunday Night Football… seriously?).
7. Access to my entire content catalog across all my devices is awesome.
8. Apple TV rocks.
9. 1990’s era MTV reality shows are a hoot.
10. I miss channel numbers.

This experience has left us fascinated with OTT ad tech. Stay tuned for more articles about it here at Advertising Perspectives.

 

 

So it’s been over four years since we first posted “Are Ad Exchanges and RTB the Next Big Thing?“. We are amazed that the article is still being referenced as a resource for this topic. Let’s take a look and see what’s developed since 2010.

Real Time Bidding (RTB), is now often associated with “long tail” remnant inventory and being risky in terms of transparency around placement of impressions. Buyers cannot always determine exactly what site their ads run on. Publishers have often referred to the technology as “Race to the Bottom” as automated auctions drive CPM’s lower.

Now for the good news. The technology developed for automated auctioning of inventory has been re-branded as “Programmatic”. Programmatic is as buzz worthy in 2014 as RTB was in 2010 and has the potential to be even more influential. Here’s why:

• Data: The technology stack enables the ability to target audiences in real time based on first party (publisher or marketer proprietary), second party (syndicated) and third party (aggregated) data. This technology has not only driven digital marketing growth rates, it will likely revolutionize the linear broadcast, cable television and on demand ecosystems as well. Television advertising is shifting from targeting based on the demographics of the show to targeting specific audiences based on data. Sound familiar?
• Workflow productivity: Traditional digital buying revolved around the same workflow as traditional media: humans negotiating the terms of an insertion order. That means phone calls, emails and lots of excel. Top talent coming out of college, often with student loans to pay off, are not flocking to media agencies to do low paid grunt work. Conversely, top engineering talent that once headed to the financial services industry to build trading desks are now building Demand Side Platforms (DSP), Supply Side Platforms (SSP) and Data Management Platforms (DSP).
• Removing the auction elements of the stack and replacing them with a means to allow publishers to set prices, establish guarantees on placement and leverage premium inventory, enables targeted marketing at scale with benefits to publishers, agencies and marketers alike.
• These exchanges can be public like RTB, open to all marketers, or private, where publishers can control who has access to the inventory and at what price.

Note the reference to “marketers” vs. “advertisers”. The technology has evolved far beyond just buying and displaying ads. With rich data integration, marketers have converted the “Marketing Funnel” into the “Consumer Journey”. They can put the right message to each interested consumer at he right place at the right time. Awesome, right?

Not so fast kemosabe. Challenges remain:

• The ecosystem is fragmented: Venture capital and the desire for profits has fueled literally hundreds of start ups and not all of them will survive. There are so many technology vendors and inventory sources in the space that marketing campaigns at scale are difficult to manage. There is a wave of consolidation happening and this will likely accelerate.
• Lack of transparency around price and placement: Agencies and exchanges profit by being principals in transactions, often not revealing the prices paid for the inventory. Marketers are starting to push back, in some cases bringing the technology in house. Marketers are also concerned with brand safety issues. They often do not wish their messaging appearing alongside objectionable content.
• Fraud: The technology that enables the ecosystem is vulnerable high tech criminals intent on manipulating it for financial gain. Fraud is the biggest threat to the growth of the programmatic ecosystem.
• Cookies: The cookie, which is the linchpin of most targeting mechanisms, is long overdue for replacement. The technology was never meant for what it is being used for and is arguably the weak link in the system. Additionally, cookies are not pervasive in mobile and mobile is the fastest growing digital platform. Marketers want to be able to target audiences across all platforms.

So, is Programmatic the next big thing? No, It’s already a really, really big thing. Depending on who you ask anywhere from 23% to 85% of marketers have embraced programmatic buying. As is often the case, the real number is probably nearer the middle of that range, but it’s still a big number and growing.

What’s next? Marketing Automation. Plugging customer relationship management (CRM) and internet of things (IOT) data into the ecosystem. Yes, your refrigerator will send a push notification to your car to tell you that you are low on milk and present you a coupon for your favorite brand at the retailer you are about to drive by. And since you aren’t physically driving the car, you’ll just tell it to stop and park.