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Saturday, April 18, 2015

Make Way for Programmatic Advertising Buys



I’ll admit, it was some years ago when I would get a call at 3 in the afternoon on a Friday about a particular advertiser jumping into a weekend movie or sports event and how I thought it would “do.”  It was “fire sale” time and as a full-service agency with blue chip clients, they called us at three.  Then they called the bottom feeders at 3:45 (that’s quarter of 5 in New York) with whatever the full-service guys didn’t buy.

For me, saying yes just meant that I thought the show would do as well as was being stated and wouldn’t offend the prospective client.  The media buyers (if I call them buyer-planners, you’ll figure out the shop so I won’t do that) evaluated the offer, how it fit into the plan and what was available to run.  It was great for the client but took a lot of agency time mopping up on Monday or whenever the book came out and the call about underdelivery and makegood offers were received, adjusting the schedule and sometimes “finding the money.”  They did it because it was right for the clients despite the work.  There were lots of Friday nights spent with media buyers working with account and traffic folks to get commercial material out to the integration point.

That’s a bit tongue-in-cheek except for the workload.

What’s that they say, “Sometimes, when everything changes, nothing’s changed.”  And here we are.  Programmatic advertising has a substantial foothold in the digital world and it’s making its way into broadcast.

Programmatic…an interesting term; one that doesn’t reflect its concept.  If you’re in broadcast and haven’t been following the digital side (blame it on being overworked) the programmatic world means machines talking to machines to hit demo, reach and frequency targets…and doing so in real or near-real time.
Courtesy Varick Media
Boss:  "What are you doing?"  Buyer:  "Buying."  

Machines?  No buyers phoning and asking for avails?  Nobody telling a radio sales guy, “Look, I’m buying 18-34 3 deep in the top 30.  That’s it.”   Yep, machines.

Stations are either incorporating software directly or aligning with a number of services to aggregate their inventory for sale.  In most cases, you assign X inventory to the system and it gets offered for sale.  Stations can determine the costs – well, you’d have to agree, it’s the marketplace that ultimately determines the costs – they get inserted then seller machines talk to buyer machines and it’s off to the races.  Buyers can buy in the future or real time.  Of course, wait too long and that inventory you wanted may be gone

The concept isn’t new to the digital world.  Online is available this way now.  It’s a natural extension to broadcast media.  As a consequence, traditional stations and shops are moving into the digital world, some willingly and others dragged at the hands of either unsold inventory or infrastructure costs.

Keep in mind that you get what you get.  Machines aren’t all that smart and the buy will be pretty parochial.  If you want isolation, forget it.  Protection, like keeping a Southwest Airlines out of the movie Alive, generally is not available.  And as far as post buys are concerned, that depends on the programmatic organization. 

Buyers can buy [cheap] with nothing as a post but the invoice.  On the other hand, both advertisers and stations can get nearly instant reports sliced more ways than with a Popiel Kitchen Magician.  And it all integrates with traffic, billing, operations and virtually any other area of the plant.

Think about what this gets the advertiser.  He/she can run a consistent campaign across all media, directed at exactly whatever the desired demos are, and probably buy it for a lot less than is being paid now. 

If you’re tracking my thoughts, you’ve fast-forwarded to “so who needs a national rep?” which would make you fear for the demise of the wonderful rep firms.  Well, they see the freight train coming and many have already adapted including a Katz/iHeartMedia alliance for aggregating and selling radio advertising via programmatic. 

But remember, during all of this, it can be machine talking to machine, freeing up people for more creative and entrepreneurial activity – better programming, more promotion, whatever.  Then again, it could reduce your staffing needs.  If you just sign up to sell that “excess” inventory staffing won’t change but as programmatic sales succeed – as defined by increased advertiser satisfaction – you’ll probably find yourself rolling more inventory into the programmatic world.  Especially when it makes it so easy for those advertisers to achieve their goals – and you don’t even have to care about what they are!

Your concerns become questioning what is selling versus what you’re offering then tailoring your programming to reach the very people that are being “purchased.”  That way, the computer sees you and buys you.

Is this fun or what?

Well, let me throw something out there:  How many sales guys have developed a relationship with your clients?  How many times have you been able to jump in and help move someone's product because you knew what the problems were or what challenges they were facing and you got past that?  How many times did a relationship get you a buy that was a toss-up with a competitor?  Yeah.  Wad that all up and throw it away.  And your reputation for delivering?  Tie that to a CPU somewhere in Virginia.

If you get the chance, check out simulmedia.com, tubemogul.com, wideorbit.com, katzmediagroup.com, and the programmatic organization, programmaticadvertising.org/.   

NB:  Did you know the Kitchen Magician made julienne fries?

Sunday, February 1, 2015

A Look at the Big Game



I think the only reason I sat down to watch the Super Bowl® was so I could write this.  Turns out it was a doggoned good game.  I didn’t have a horse in the race so really didn’t care.

OK, maybe I was a little put off by Richard Sherman.  Hey, man.  When you’re talking to the media, you’re talking to your fans…you know…those folks that plunk down those green pieces of paper for tickets, broadcast packages, advertised products, merchandise and the like.  The green pieces that you stuff in your pocket to the tune of $56,000,000.  So to hell with whatever other issues you have.  Talk to your fans.

I won’t recount the game except for a couple of comments.  First, if New England hadn’t won, Brady would probably have been run out of town for throwing the first half interceptions.  Second, the fight following the second-last play undid all of the “PSAs” (quotes around the term because they weren’t public service announcements as much as the NFL trying to trowel over its problems) they ran the entire night.

Halftime?  Interesting.  Katy Perry?  OK.  Execution?  Good but no Chinese Olympics Opening Ceremonies.  Let’s call it superficial and leave it at that.

As for the commercials, well, anyone remember Charlie Harper’s line in Two and a Half Men when he’s trying to explain why the commercial music business is in the dumper.  It was something along the lines of, “Hey, why should someone hire me to do music for a new tampon commercial when they can just go buy ‘Stuck in the Middle with You?’”  The game’s commercials helped prove his theory.  Seemed like I was listening to an oldies station during the breaks as one spot after another relied upon the nostalgia of ‘60s music to create some sort of favorable emotion.

In support of some of my earlier blogs, anyone else notice the number of times the NFL Network was mentioned, promoted, or credited?  Like I say, in a couple of years, who’s gonna need a “channel”?

Beyond that, nothing blew my socks off.  Not as many “reveal” spots trying to hide their actual sponsorship till the last two or three seconds so someone must have read my blog from a past Super Bowl.  Maybe the Doritos Flying Pig moved the needle a bit if you forgive the mediocre effects but the promos for The Blacklist scored higher in my mind than any of the spots.  I’m just sayin’.

And all you newcomers, hoping to stake your company’s claim to fame by blowing 2 to 4 million dollars, you didn’t.  None of you.  But they may have some parting gifts for you.  Maybe a ballpoint pen or Super Bowl XLIX mug or something.

Saturday, January 24, 2015

How's that Cable / Satellite Bill Doin'?



When my bill for receiving WCPO, WCHS and WSAZ went from $2.00 to $2.25, I was ready to throw in the towel.  Where would it stop.  Fact is there really wasn’t another way to get a signal in that hollow.

So, today, does it bother me that folks paying between $100 and $200 a month are about to get a 5+ percent kick in their backside?  Well, yes.  Of course.  I’m one of them. 

First, full disclosure:  When someone says it’s not about the money, it’s about the money.  So with that out of the way, I’ll go on to say that it really isn’t about the money (see immediately above) but the fact that these guys’ timing is pretty poor.

A look at the landscape:  We still have over-the-air (OTA) television.  We have access to cable, to satellite and to copper-delivered entertainment.  Beyond that, we have IPTV and OTT.  When I talk about IPTV, I mean any system that delivers content using Internet Protocol.  This could be via an infrastructure provider, e.g., a cable provider using Internet Protocol to deliver select content…VOD and live events. 

It also could be via the Internet though that has come to be called “OTT” or Over-the-Top, a term that has become synonymous with Internet delivery.  But it gets narrowed a bit in that it’s usually meant to mean content that doesn’t pass over cable or satellite or copper based services.

Confusing?  You bet.  After all, content comes over cable.  Some people have Internet delivered via cable.  But the nuance is that OTT is delivered via the Internet, itself.  If your cable company provides your Internet, the OTT content comes directly to you via Internet without the cable company “handling” it.1

Let’s throw another acronym into the mix:  MVPD.  Multichannel Video Programming Distributor.  These are the guys who distribute more than one program source at a time – the cable companies, satellite organizations and telcos who deliver the 30 to 3000 programs to your home

They’re different from the OTT guys like NetFlix and Hulu.  Both of these deliver content to you via the web directly.  Many others are getting into OTT.  As anyone who enjoys multiple types of entertainment knows, all of these acronyms have the nerve to charge something for their service.  Like their employees have to eat or something.

I’ve written a couple of times in the past about distribution and channels (see the blog just below).  Every time I do it is with attention to ever-expanding sources.  And now, the sources are starting to step on one another. 

While it may not have been the first such situation, but arguably the most famous is Sony and the BetaMax.  Sony hardware got a great product to market.  Sony software started yelping.  Now we see cable owning broadcast, broadcast owning cable, most of them providing some type of Internet, satellite, and the Internet, itself, where entrepreneurs are desperately trying to distribute all the other guys’ stuff and make a buck at it.  And it’s like a car keys party of the ‘70’s (so I’ve heard).  Who knows who’s pairing up with whom next. 

The diversity and mix makes it a regulatory free-for-all and it’s dangerous to jump in with laws and rules without realizing that the arena is one big Pillsbury Dough Boy.  You push in over here; something’s going pop out over there.  Unintended consequences hiding in the weeds everywhere and if there’s one thing the government isn’t good at, it’s planning for unintended consequences.  Yeah, oxymoronic, but you get the point.

Speaking of point, let me get to mine, finally.  Rates are going up again.  The primary driver is sports programming.  ESPN is the biggest culprit.  Here’s The Wall Street Journal’s chart developed from SNL Kagan’s numbers.





















That’s 2014.  The producers are back seeking another bump.  It’s that 5+ percent I mentioned at the top.  Now, according to Kagan, program costs were up 9.1 percent in 2013 and 8.1 percent in 2014.  I’m saying 5+ percent in 2015 because it’s safe and it’s what some in the industry think will be close to accurate.  Kagan says 8.8 percent but that’s just one source. 

That begs the big question.  How much longer will people pay for things they don’t use?  I know that when I order Buffalo wings I get both ranch and bleu cheese dips.  The bleu cheese gets dumped.  Should I be able to buy the wings for 20¢ less by telling them to keep the bleu?  I don’t use the rear power outlet in the car.  Should I be able to buy it without?

You know where I’m going.  I’m paying for hundreds of channels and watching only a few.  Stop charging me for the bleu cheese and the power outlet. 

I’m not the only one.  Here’s Nielsen’s evaluation:














Looks like we’re all paying for a lot more than we’re using. 

When does that stop?  A number of factors come into play.  First:  Channels (wrote about it last time).  When folks go to a provider directly, voila.  They’ll pay.  But they’ll be the only ones paying.  You think content providers aren’t scared of this?  No?  Think again.  Second, when subscribers start demanding a la carte from operators.  Some folks equate tiers with a la carte.  Not the case. 

The tiers are stacked to pack in channels you don’t necessarily want with those you do – amortizing the per-sub costs for the operator.  A la carte will mean you choose – not from column A or B but from the entire list.  It’ll have the about the same effect as going directly to the provider.  Maybe better since Disney may well try to package all the Disney/ABC/ESPN/History/A&E/so on networks for one price.  And it’ll be up to the consumer to decide. 

The third factor is third party OTT where a Hulu manages separate streams for content providers.  Oh, wait.  Who owns about a third of Hulu?  Right.  That would be Disney.

The important thing is that some sort of a la carte is heading our way.  Most of the financial guys on the supplier side don’t see it.  They don’t want to.  Think of the dominoes that will fall.  With sports, if non-sports folks aren’t subsidizing the sports lovers with their cable/satellite bills, what happens to rights fees?  And, if rights fees fall, what happens to pro sports leagues?  And if the leagues have their revenues cut, where do those poor players turn?

Does it matter?

As an example, Thursday Night Football moves from CBS to The NFL Network after a few games.  CBS continues to produce – and to weaken its Thursday night lineup with non-sports fans – the games for the NFL.  And how long does that go on?  When does the NFL really start producing their own games, on their own budget and distribute directly at a profit.  Are there enough Thursday Night Football fans around willing to make it profitable for the NFL?

Does that matter?
If, tomorrow, the Lorre Channel launches as the only outlet for all of Chuck Lorre Productions’ fare, are CBS and all those rerunning the series in trouble?2  

Tomorrow?  No.  Next Tuesday?  Keep driving those prices up and maybe.  At a buck a show, I can watch 140 programs a month that I want and come out better than I am now.

1 Watch out here!  That pesky “net neutrality” provision could change this completely.
2 Yeah, yeah, I know, existing contracts, blah, blah.  It’s an example.