Imagining a better way to trade advertising – across all video platforms

Graham Heap is senior director of product management at Imagine Communications. He is responsible for the strategic direction of Imagines’ extensive ad tech portfolio. Graham has been working on the design and development of media software systems for more than two decades, specialising in linear and non-linear ad sales, rights management, scheduling and audience-based optimisation solutions, in a global context.

Linear television channels are under threat. If some are to be believed, it is an existential threat. Yet linear broadcasting will always likely remain superior at delivering content to large audiences live and as it happens: sport, news and big-event television being the most obvious examples.

At the same time, broadcasters cannot simply pretend that streaming does not exist. No broadcaster today would be without a strong digital presence, offering streaming linear, catch-up services and video on demand. Our view is that, by 2030, we will see a 60/40, digital/broadcast advertising revenue split. As part of the overall mix, well curated linear services will be not only viable, but will be popular and required, for decades into the future at the very least.

In marketing to the viewership, broadcasters go to great lengths to associate traditional linear and online services, making it clear that they offer the same high-quality content from the same trusted source. Yet when it comes to advertising, the situation is much more divided.

Traditional linear advertising in many markets is sold by spot placement. Advertisers have a say on exactly where the commercials are placed, and know in advance which programmes all their spots will be in.

Advertisers also have the assurance that the broadcast sales process will curate commercial schedules to avoid conflict between brands. If you are, say, BMW, you can be certain that your spot will not be immediately followed by a Volvo spot or inside a show that Volvo is heavily sponsoring.

The association of known and premium content with careful curation and placement management is a cherished characteristic of television advertising. I call this “Broadcast Quality”. Alongside unparalleled reach and inherent brand safety, this is what has made television the premium advertising medium. Globally, television accounts for 90% of the average viewer’s video time (source: The Global TV Group), and advertising rates reflect that.

Digital advertising, on the other hand, has grown up in the computerised, automated era, and the sales and placement of commercials is largely, and typically bluntly, automated. Ad sales for digital services are handled by huge ad serving operations. Placements are by algorithm, designed solely to deliver a promised audience size and demographics. That means that commercial breaks and overall commercial schedules are far less structured and self-regulated, and the quality drops. The result is more brand clashing and more annoying repeated ads for the viewer.

In both television and digital advertising, the ultimate metric is the audience size. How many of the right eyeballs watched a particular commercial? Today we tend to measure that in CPM: the cost per thousand views of a commercial. That is easy for digital services to deliver, because they have an identifiable relationship between service and consumer in a one-to-one stream. Broadcasters quantify by building schedules to attract specific audiences, then measure retrospectively using proven market research techniques.

Finally, digital rates tend to be significantly lower than broadcast overall. So with the balance between digital and linear shifting, how can broadcasters maintain their revenues whilst retaining the ability to command close to their premium rates?

Meeting the digital challenge

For most broadcasters, sales for linear and online services exist in separate silos, each with its own sales operations and fulfilment systems. Some broadcasters have even outsourced online advertising to the programmatic placement specialists.

They may be gambling on linear television viewing tending to zero in the foreseeable future. But I do not see that happening.

At Imagine, our view is that linear and digital advertising can be managed in a single approach. Just as the broadcaster has a single identity and brand values to the consumer, whether they are watching live or online, so should there be a single identity and single value proposition to advertisers.

To achieve this, you must first change the paradigm of linear advertising. You need to journey away from the negotiations around individual spots (and the consequent tax of ‘making good’ on displaced units) to the proposition of meeting defined numbers in defined audience demographics, whatever the platform, e.g., “Your spots will be seen by 10,000 25 – 35-year-old females, during and around our content, whether they are watching on linear television broadcasting, live streaming or on VoD”.

We call this Adaptive Audience Fulfilment. You are not selling spots in particular programmes (except perhaps where genuine super-premium rates are in play), nor are you giving away your advertising inventory for others to profit from. One sales proposition — your broadcast brand — and one sales process, placing spots across all distribution chains to achieve the required audience.

Accomplishing this means not just refocusing your proposition, it means making a substantial change to the way you sell and schedule. Adaptive Audience Fulfilment, while maintaining the qualities that makes linear television such a premium environment, requires sophisticated campaign planning, monitoring and reporting.

For most, it likely also means adding targeted advertising to the mix. Dynamic advertising insertion is slickly achieved client side in streaming services, and new digital distribution platforms and ATSC 3.0 make it practical to switch out advertising in live linear broadcasts. Pan-industry initiatives like On Addressability and Project OAR (open, addressable, ready) are promoting the advantages of addressable advertising.

Powerful technology such as Imagine’s Landmark Sales platform can deliver Adaptive Audience Fulfilment with the necessary ‘broadcast quality’, while Imagine’s xG GamePlan cloud-based optimiser can take the audience commitments made and automatically deliver them in highly efficient ways to free up inventory and increase revenue opportunities.

Such technology is already in use around the world. Nine Network in Australia was able to go from zero to more than a third of their inventory sold in Adaptive Audience Fulfilment contracts, while at the same time substantially reducing its operational costs and maximising revenues.

If broadcasters are to level the playing field between linear and digital advertising rates and maintain the premium which allows them to continue to invest in quality content, then they must take coherent control of the monetisation of all of their advertising inventory. Adaptive Audience Fulfilment is fundamental to this, helping to bridge the gap between spot-based linear and digital ― and demonstrate to advertisers that they are hitting their goals in a targeted, effective, brand-safe and affordable way.

Photo by Murai .hr on Unsplash

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