Battle for the living room is heating up between broadcasters and “Sorrells” of the world, says Decipher MD Nigel Walley
As the world of traditional TV continues to converge with the web, a nasty, behind-the-scenes fight has broken out between the broadcasters and “the Sorrells” of the advertising industry over who will control the ad servers in our set-top boxes, according to Decipher managing director Nigel Walley.
Speaking at The Future of Advertising in One Afternoon conference this week, for which The Drum was a media partner, Walley suggested that at the moment the TV and web industries are fundamentally different in the approach to selling ad space.
“If you wander into ITV today, you will see a trading floor which has not much changed from the late 80s. There’s still 400 hundred blokes shouting down phones selling advertising space. Between September and December, they all disappear into the back offices of agencies, doing deals and selling TV that even the European commission has questioned. It is like the dark days of the city. Whereas the web has gone into RTB, and data,” he said, comparing it to the impact programmatic buying has had on the way ad space is sold on the web.
However, he continued to say that at the moment it is set-top boxes that are “blurring” the worlds of TV and web in interesting ways and that we’re seeing “a plethora of innovation around the advertising formats.”
“What is interesting is that it’s broadcast centric and we’re seeing an innovation in TV and rather than the web taking over TV, the future is much more nuanced with an interlocking of web and broadcast content,” he continued.
Walley predicted that by 2025 the set-top boxes in our homes will have gone through one big evolution to become media and ad servers.
“You see a hint of this with Sky’s AdSmart initiative where they’ve integrated broadcast telly with dynamically served ads. The set top box becomes the heart of this world. What it does mean is that it throws the power toward the set top box people,” he added. “But the Martin Sorrells of the world would love to shove their software into the back of broadcaster players. They want the whole thing sold programmatically.
He went on to predict that this will be the next big convergence and that right now there is a battle over who will control it.
“If you believe what I am saying, and that there is a new world of programmatic is it the broadcasters that are going to do it? Are the Sorrells going to plug their software into the back of set top boxes? Is it Google?,” he said, suggesting that ultimately, whoever controls the data will win the battle for control.
He elaborated: “[Sky] has the data, the system, and controls all the advertising going into that system. And the key thing is the data. They know my name and address and what I buy from them, that’s obvious. They know my bank details. They know my wife’s name and age. They know my kids age and sex, they know who I mortgaged my house with, who I insured my house with, when the policy was up for renewal, who I financed my car through. And 14 other layers of insight. Google claim they have data but they have bugger all."
Whereas if a broadcaster like Sky owns the data and the set-top box then its position in the market could be difficult to contend with.
Walley ended by saying that at the moment we simply don’t know what the outcome of this fight will be, “but we’re at the cusp and this is a real problem.”
His predictions echo comments made by former online marketing controller at BSkyB Joes Christie, who said that the the future of programmatic lies in smart TVs.