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The Fundamentals of Premium Video Advertising During a Time of Change

Vincent Flood  20 April, 2016

Thomas BremondAs the TV advertising world undergoes the greatest technological transformation in its history, it has become increasingly difficult for even the most seasoned of broadcasters to map out a clear strategic path. Here Thomas Bremond, European Managing Director, FreeWheel, sets out three fundamental principles which he believes should form the foundation for a broadcaster’s video advertising strategy.

The premium video ad market is currently in a state of flux, which is a major concern for premium broadcasters. On the one hand they want to stick to selling models they know, (and know will help them remain compliant with their regulators), while on the other they want, and need, to embrace planned automated buying methods as programmatic TV takes off.

The broadcast entertainment industry is seeing an increasing fragmentation of devices and audiences, with new screens and many different measurement currencies. Despite all these changes to the landscape, the concept is the same as ever – ensuring the right marketing messages appear in front of the right and largest audiences while maximising revenue.

However, TV is not like online video. While premium environments do exist online, they aren’t as heavily constrained as TV, and certainly not as regulated. If broadcasters aren’t compliant in how they offer ad space, there is real potential that they could lose their licence and that risk simply does not exist in digital. To ensure that this doesn’t happen, there are three fundamental elements that broadcasters need to think about in order to create a profitable and compliant business.

1. Unified planning and selling

Planning plays a key role in smoothing the budgeting peaks and troughs. A publisher can choose to plan ahead – such as the upfronts, where spots are filled in advance of the TV season – or opt for an RTB-like business model working on much shorter time periods. While a broadcaster could generate significant more revenue by operating on an RTB business model, the risk is that they could just as easily lose revenue because in an unplanned mechanism there is no guarantee that the placement will be sold at short notice.

Choosing not to adopt a planning-based model and opting for a basic RTB-like system also makes it much harder to know exactly what will appear and where. It can be embarrassing when the competitor of a show’s chief sponsor lands next to the buffer ad. This is a lot less likely to happen when spots are sold in a planned way, whether through upfronts or programmatic. Planning models also makes broadcasters significantly less susceptible to regulatory breaches, whereas RTB-type models only operate in the short-term and don’t allow for planning against the correct spot for the ad itself.

Adopting the right approach is more important than ever, given the array of live feeds to monetise, as opposed to dealing exclusively with scheduled ads. Broadcasters now have programmatic, dynamic, and operator ads – all coming from different sources. Managing inventory and yield is now more complex. Without the appropriate planning, this can potentially lead to trouble.

2. Create meaningful scale

Planning is just one element broadcasters need to factor in. Delivering campaign at scale to advertisers, should be at the very heart of any scheduling decisions the broadcaster makes, along with providing the ability to grant access to inventory regardless of the screen it will be played on. By taking these steps broadcasters are able to prove to their advertising partners that their inventory really is of a premium quality and will deliver a meaningful ROI.

This scale must extend to digital as well as TV media to avoid a ‘closed ecosystem’ in which broadcasters and operators focus only on one or two different devices. Such an approach would put all the risk on the broadcaster. Targeting all devices with the view that they’re all TV, so prioritising breadth over depth, would maximise the reach to audiences in all environments and should offer the necessary scale.

3. Automation

There is a lot of talks around programmatic, and while the industry is moving in this direction, right now the volume of premium video being transacted programmatically is still very low.

The whole industry needs to rally on best practises around programmatic in a TV environment and how to adopt it. It has to start as a tool that can work across all platforms and grow into them organically. Ultimately, if applied properly, automation combined with appropriate use of data will work for both the sell and buy side. While the advertiser gets access to premium inventory at a reasonable price and targeted at the right audience, the broadcasters get the best revenue possible for that inventory. By working in a unified fashion the whole ecosystem can profit, including the consumer who sees the right type and quality of ad they expect to see on their screen.

The benefits for both broadcaster and advertiser are numerous. The broadcaster will achieve an increased value for its unified inventory as well as decreased operational costs. It will be able to better protect and use data and will be in a better position to predict revenue. The advertiser will likewise have the chance to mine and protect data while also benefitting from increased transparency and increased scale. Moreover, the advertiser can enjoy improved performance without worrying about the delivery and scarcity risk. Ultimately, the two can work together to combine premium content with data in the appropriate context to offer a premium experience to all parties.

Successfully selling inventory has never been more complex for premium broadcasters, experiencing rapid and profound changes. While also trying to find ways to maintain and increase revenue, they need to integrate models that can help them sustain the business in a fractured environment. By incorporating the three fundamentals of planning, scalability and automation, broadcasters can create a more predictable and stable environment that will enable to continue delivering premium quality content and ad experiences to consumers as well as high value and fraudless inventory for the advertisers and their agencies.

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