Video Essentials

Fox and AOL on the Convergence of TV and Digital Video Ad Buying

There’s awareness of addressable TV ad buying, but we’re not there yet. At today’s Video Nuze Advertising Summit in New York City, Fox Networks and AOL looked at where we stand in online video advertising and where we’re headed.

“We’re interested in it,” Dan Callahan, vice president of programmatic sales at Fox Networks said of addressable advertising. “None of the programmers today have addressable capabilities.” Addressability would let buyers target TV viewers with the same specificity they do online viewers. It will happen, but it’s not here yet.

David Simon of AOL talking with moderator Brian Danzis of Brave Media Ventures.

David Simon of AOL talking with moderator Brian Danzis of Brave Media Ventures.

Networks need to bridge the gap between brand and agencies, giving them what they want, which is addressability, Callahan said.

“With linear inventory there’s scarcity,” he added. When banner ads were new, publishers simply added more to them to their pages, leading to commodification. Fox plans to avoid that by taking a reverse approach to premium video ads.

“Our game plan is to not add more commercial breaks,” Callahan said. Instead, Fox will offer buyers better viewer targeting, commanding a premium by delivering targeted viewers who aren’t oversaturated with ads.

Callahan saved his strongest words for the topic of viewability. The IAB-backed standard isn’t enough for Fox.

“Two seconds for 50 percent is not good enough, in my opinion,” Callahan said. If his network shows a premium program that is watched at full screen by viewers who sit through the breaks, that’s worth more than a two-second glimpse, he believes.

Going forward, Fox is taking a screen-agnostic approach. It’s Audience Insight Management tool helps agencies target preferred customers on any device. Callahan notes that there’s no duplication of viewers between TV and online, so agencies should “continue to spend in both lanes.”

The biggest obstacle right now to video advertising’s future is not the lack of addressability, Callahan said, but the need for better measurement, especially for video-on-demand content.

AOL sees the future of video ad sales through programmatic glasses, which is no surprise given the investment it’s made. AOL has “latched onto and put a death grip on” programmatic buying as essential to all sales channels, said David Simon, vice president of inventory acquisition for One by AOL. It’s no longer a function available through different channels. “Programmatic is at the center of everything we do,” he noted, adding that AOL doesn’t have a legacy TV ad sale business to update.

Mobile will drive the programmatic market, Simon believes. It’s hard to get 100 million impressions per year from premium inventory, he said, but mobile is changing that thanks to rapidly increasing viewer consumption. That creates the opportunity for a liquid market for programmatic buying.

While Simon sees newer metrics giving the industry something to trade around, he believes real value comes from sales conversion data, which programmatic delivers, he said.

Following Verizon’s acquisition of AOL the combined company is creating a massive people graph that links Verizon’s customer base with all their devices, then tracks behavior across them. That’s 150 million subscribers with multiple devices, Simon said. It’s sure to be a big asset for buyers when completed.

In the short term, Simon believes we’ll all be taking about the massive success of Snapchat’s ads in one year’s time, calling the company “an absolute force” that will capture a huge amount of ad spending. In the long term, he sees the move to programmatic and addressability as a 15-year shift that we’ve only just begun.


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