Back in February, European broadcasting rivals RTL Group and ProSiebenSat.1 announced a new partnership which will bring together their ad tech businesses, Smartclip and Virtual Minds respectively, creating a new combined offering for advertisers. The two said that creating a scaled ad tech proposition tailored to the European market would provide a significant boost to European broadcasters’ ad revenues.
Beyond broad intentions, the initial announcement didn’t provide much detail on exactly how this combination would work. But in last week’s financial results, RTL outlined its vision for the joint project, which the company says will “create a holistic TV advertising and technology solution that merges the worlds of linear TV and streaming TV”.
Enhanced panel data, real-time optimisation, and auction mechanics
Speaking on an earnings call following RTL’s results, Smartclip co-CEO Thomas Servatius laid out the major challenges facing broadcasters: audience fragmentation resulting from the growth of streaming and fall of linear TV reach, as well as advertisers’ expectations around simplified access to TV inventory with transparent KPIs and ROI measurement. Thus the need to unify linear and digital buying.
Servatius said that given this goal, RTL and Prosieben’s tech stacks are fairly complementary. RTL has focussed tech development on streaming TV and digital video, while ProSieben’s Virtual Minds runs solutions which bring digital practices to linear TV. But combining these technologies and creating one unified solution means making choices on whether buying and selling will look more like traditional linear or streaming TV.
The two have started making some of these decisions. Firstly on the data side of things, Servatius said the solution will use traditional panel data, enriched by anonymised behavioural data from smart TVs in Germany. Secondly, it will adopt an auction driven approach across all TV inventory, which Servatius said works best for optimising value both for buyers and sellers. Thirdly, all solutions will be driven by AI and machine learnings technologies. And finally, the product will use real-time optimisation for both digital and linear TV.
Servatius described this last point as “the true revolution” of the joint project. “In the new universe, we will use real-time data from smart TVs to monitor the real target group coverage of linear TV, seconds before a linear TV ad break is broadcasted,” he said. “This data is used to check if the actual TV viewership corresponds to the expected TV audience when the TV ad break was planned. If we find a strong difference between the expected and actual audience, we adjust the linear TV ad break by selecting ads which better match the actual viewership demographics.”
Optimisation will happen across screens too: if the technology finds that an advertiser’s audience can be more efficiently reached on digital assets than on linear TV for example, budgets will be shifted to linear.
The end result of all this, according to RTL and ProSieben, is more efficient campaigns for advertisers, which are also easier to run. Servatius said that this, in turn, will help drive ad spend back towards TV, as broadcasters will be able to effectively compete with the simple buying platforms, efficiency, and real-time campaign data offered by the tech giants.
Work on the project is ongoing. Market tests for programmatic linear TV across both companies’ inventories will run until Q4 this year, with cross-TV measurement and further use cases scheduled for next year. The longer-term vision is for the technology to roll out with more EU partners, broadening the reach and scale offered to advertisers.
