Connected TV was once again a big talking point at this year’s Cannes Lions festival. And with ad budgets growing, there was plenty of chatter about the need for convergence between traditional linear broadcaster advertising and CTV.
You’ll often hear it said on panels that audiences don’t really distinguish between delivery methods — it’s all just TV. But when it comes to running an ad campaign, the two still live in separate worlds.
Most people working in the TV world agree on the need for convergence. The current state of affairs creates unnecessary complexity for the buy-side. Broadcasters, meanwhile, have wide and varied offerings to meet a multitude of brands’ objectives — pulling it all together and selling it holistically will help them more effectively deliver outcomes for advertisers.
But setting a vision on the beaches of Cannes is one thing. Back in the office, turning that vision into reality is more complicated.
German ad tech business Virtual Minds is one of the companies at the forefront of this push, building an infrastructure layer to help bring about convergence. Through its work in Austria, it’s already contributed to one of Europe’s best examples of how a converged “total TV” market can operate. VideoWeek spoke with Max Deyerl, Manager Business Development at Virtual Minds, to hear about the company’s vision for converged TV marketplaces, and the obstacles the industry needs to overcome to get there.
Mind the operational gap
A lot of work has already gone into creating a total TV experience from the viewer’s perspective. Broadcaster-owned streaming services have evolved beyond catch-up services that act as a complement to linear broadcast channels. Now, they stand shoulder-to-shoulder with linear as primary gateways to broadcasters’ content offerings.
It’s a different picture on the advertising front. “Many broadcasters, content providers, and inventory holders are still operating in different silos,” said Deyerl. “They have a silo for selling their linear inventory, and they have a silo for streaming and CTV.” Even when broadcasters do offer total TV packages, the operational reality is different. “It might be described as total TV, but if you go into the engine room, it’s not,” said Deyerl.
This siloed model creates a lot of duplicated work when it comes to running campaigns that span linear and CTV, with manual handovers and avoidable costs. And the friction of buying linear alongside CTV and digital video may put TV as a whole out of reach for digital-first buyers. That’s why Virtual Minds says it’s a pressing issue.
“We think that convergence is a must-have for the future,” said Deyerl. “It’s important that ‘total TV’ applies to operational models and that it’s not just a claim, but it’s actually sold that way.”
Connecting tech, not replacing it
One approach to convergence could be to scrap these existing systems and build one entirely new end-to-end model for total TV. But Virtual Minds believes that building an interoperability layer, rather than adding another system to the mix, is the best way forward.
“There are existing systems for linear TV and for digital which have worked well for years, and there’s not much need to change these workflows and these systems,” said Deyerl. “What makes more sense is to put a layer on top which brings interoperability to these systems and connects up the silos, and that’s what we’re working with our partners to build.”
This approach maintains the strengths of these existing systems. It retains control, independence, and domain-specific capabilities within each sales operation, while smoothing out the inefficiencies and complexities of navigating disjointed operations.
Even with an interoperability layer established, there will still need to be changes to the ways digital and linear inventory are handled, in order for them to be sold in a truly converged manner. Deyerl says that given how buyers tend to be more digitally minded nowadays, it would be to linear TV’s benefit if it could operate a bit more like CTV.
“There’s certainly complexity when it comes to buying linear TV, so I think it needs to become a bit easier to access to meet the needs of the buy-side,” he said.
There’s been some progress on this front already, as a number of broadcasters across Europe have started trading linear TV on a cost per mille (CPM) basis.
“I would say that’s something we need on a converged total TV platform,” said Deyerl. “We need a reliable measurement standard, and a common logic for how to measure reach or impressions, so the buyer can easily compare channels.”
With all of this in place, the end goal would be for buyers to be able to create and manage campaigns across linear and digital environments through one operational layer. With this kind of infrastructure, a total TV campaign could optimise across inventory types based on an advertiser’s objectives, without the brand or its agency having to plan and book separately across channels.
“If your target as a buyer is to reach women between 30 and 45, for example, it’s not really important if you reach that audience with streaming inventory or linear TV inventory,” said Deyerl. “It’s more important that the campaign reaches its goal. The interoperability layer we’re building will be able to do just that, to optimise campaigns across inventory types where that’s needed.”
Lessons from Austria’s converged marketplace
As well as the technical work needed to get to this goal, Deyerl says it’s also important that there’s collaboration across the industry. If broadcasters aren’t aligned in their approaches, the risk is that they end up creating more complications, as buyers have to navigate a multitude of disjointed frameworks for buying converged TV campaigns.
“You’ll always need common decisions about standards, for example,” he said. “How do we want to sell our unique inventory to the market: do we want to sell via CPM or another currency, do we want to use JIC data or extended JIC data? Broadcasters need to agree on these things, and that requires collaboration.”
“Fragmentation in the market always costs money, and makes it much harder to sell inventory,” he added. “And without collaboration, I think broadcasters will find it harder to compete with the American platforms.”
The aforementioned market-wide shift in Austria provides a good example of how collaboration can deliver meaningful results when well-executed.
“A few years ago, all the main broadcasters in Austria, who are organised under TV JIC AGTT, agreed to work together and move to a digital buying and selling model for linear TV, using real-time HbbTV signals,” said Deyerl. “They use HbbTV data to recalculate JIC measurement data, which they call Teletest 2.0, and that has eliminated the problem of zero ratings. And they’re using digital buying logic and have adopted CPMs as the currency for linear TV. By using our Virtual Minds Media Manager, they’re able to optimise linear TV campaigns using CPMs, and they can use the real-time HbbTV data they get to optimise their ad blocks.”
This approach has already proven successful in bringing digital buyers back to the table, making it easier to pitch them linear TV. It has also highlighted, however, that moving towards convergence still needs buy-in from the buy-side — and that can take time.
“We’ve seen that it’s been hard for broadcasters to sell all of their inventory this way,” said Deyerl. “That’s been another learning. Some agencies still want to book linear TV the traditional way. So the buy-side needs to adapt and learn to buy linear TV using digital logic.”
Fixing infrastructure before AI
Projects like the Austrian example are a good starting point. But for Virtual Minds, the long-term aim is to go beyond linear TV and CTV.
“This is just the starting point,” said Deyerl. “We have a vision at Virtual Minds that every type of video should be included in total video. You could add any other channel in which video plays a major role, including mobile and digital out-of-home. Those are big channels with a lot of reach, and the same logic applies as with TV. The audience doesn’t care how they consume video content. So for advertising, it should be less about the channel, and more about reaching the audience itself.”
With DMEXCO just days away, Deyerl says the need to make progress on convergence is rising. AI will obviously be another major topic in Cologne, and a lot of companies are moving quickly to integrate AI into their advertising workflows. But there are risks of doing that in a fragmented world.
“AI only creates operational excellence if you have the right data, and if you already have the silos combined,” said Deyerl. “If you layer it on a fragmented system, AI will probably expose operational weaknesses, rather than improving workflows. It’s most likely to scale the defect rather than fix it.”
As such, Deyerl is hopeful that at this year’s DMEXCO, discussions will be geared towards how we start making solid progress towards convergence.
“It was clear at Cannes that the vision and direction are settled,” he said. “At DMEXCO, we need to be talking about how we turn that vision into an operational model, and how we actually bring that to broadcasters.”
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