AOL is in talks with UK broadcasters about how it could fill their inventory with ads bought via its automated technology as part of a wider push to erect bespoke programmatic TV models in Europe, Australia and Canada.
The technology business has met with most of the major commercial broadcasters in the UK with discussions still a long way off from agreement on a concrete offering. While confident it can make programmatic ad buying for TV a reality, AOL is mindful that there are several hurdles yet to overcome.
The biggest one is data; the data it needs to offer broader targeting beyond demographics would need to come from set-top boxes. It is why Sky would be a logical partner for AOL’s programmatic play, particularly given it shares News Corp ties with Australia’s MCN, which launched the world’s first programmatic private marketplace for television with AOL last month.
In the US companies like Rentrak consolidate all the set-top box data making it easier for advertisers and media owners to access, while in Australia Foxtel is the only set-top box provider, which MCN represents in the marketplace. However, this data isn’t widely available in the UK.
“The biggest thing that frustrates me is when people talk about programmatic TV but it’s not linear and it’s not broadcast. We’ve been doing IP TV for a long time and it’s not exciting to talk about.”
Sky has AdSmart, an ad product that lets advertisers eschew the “spray and pray” model of generic targeting in favour of data points such as postcode, income and other subscription details. It is the only broadcaster in the market to share its data with TV advertisers in this way and consequently highlights the complexity of the challenge AOL faces to create a scalable opportunity for all players.
“We have to identify what the opportunity is [in the UK] and we’ll continue to chat with broadcasters and some of the data players in the market to work that out,” Phil Duffield, international senior vice president of programmatic demand for AOL Platforms told The Drum.
AOL’s move comes at a time when UK broadcasters are more willing to sell their inventory programmatically with Channel 4 now letting advertisers buy VOD ads using its audience segmentation data – as part of a tie-up with Freewheel. But this is still based on web based audiences whereas AOL’s efforts will focus on linear TV.
“The biggest thing that frustrates me is when people talk about programmatic TV but it’s not linear and it’s not broadcast. “We’ve been doing IP TV for a long time and it’s not exciting to talk about,” said Duffield.
“It’s really important that we don’t just come to market with a buy-side platform. We want to build a really strong offering that’s based on robust data to really incentivise agencies to use the platform.”
His comments allude to previous programmatic TV promises that have flattered to decieve. Many of the current initiatives on the market are built on partnerships between the buy-side and supply-side of the advertising stack, which can make more targeted TV buys but the inventory is bought through third parties and consequently the programmatic process requires enough manual work to throw that label into question.
“We have the buyer-side and the supply-side covered,” said Duffield. “We’re not talking about one-to-one addressable here. We’re talking about one-to-many using data to make smarter decisions.”
This approach is what underpins AOL’s partnership with MCN in Australia, a model on which it plans to predicate parts of its programmatic TV push into other markets. The existing model does not slot ads dynamically into TV shows as they air, with it still partly manual due to the limitations of existing legacy systems which don't support real-time-bidding technology.
However, there are early signs AOL’s approach could help pave the way for programmatic TV to take a larger slice of budgets. Since its launch a month ago, MCN said it generates one per cent of its ad revenue through AOL’s programmatic platform and expects the number to hit five per cent by the end of the year.
It represents only a fraction of the broadcaster’s revenue but the speed of growth highlights the appetite from advertisers if the proposition can be nailed. Programmatic TV will account for $10bn of TV budgets in the US by 2019, up from four per cent in 2015, according to IPG Mediabrands’ Magna Global.
While the discpline is still a way from being mainstream, American broadcasters are increasingly running tests on their traditional TV inventory with services such as AOL’s Adap.tv more established in the region due to less fragmentation and easier access to data.
Duffield said access to data in fragmented markets and the quality of that data were two of the main reasons programmatic TV’s adoption across Europe would be slow.
“Right now we’re very focused on the UK and Canada right now [for programmatic TV],” he added. “There’s so much resource that goes into making something like this work that we don’t want to spread ourselves too thinly. We want to build a really robust product for each market because they all have nuances and we have to make sure our platform is ready.”
Eventually, AOL plans to plug other parts of its adtech stack such as Convertro into its nascent programmatic TV offering when each becomes available internationally. This could mean advertisers can have clearer sight of where the TV ads sit within the consumer journey through better attribution.