In 2005 I worked on a project to map the infrastructure used for all traditional media advertising and determine if there was an opportunity to inject the new modern infrastructure of online advertising into the mix. This was a broad look at the space -- with the goal to see if any overlap in the buying or selling processes existed at all and if there was a way to subtly or explicitly alter the architecture of online advertising platforms to drive convergence.
If you think about it, this is kind of a no-brainer. Delivering tens or hundreds of billions of ads a day in real time with ad delivery decisions made in a few milliseconds is much harder than getting the contracts signed and images off to printing presses (print media) or ensuring that the video cassettes or files are sent over to the network, broadcaster, or cable operator by a certain deadline. And the act of planning media buys before the buying process begins isn't very different between traditional media and digital.
I went and interviewed media planners and buyers who worked across media. I talked to publishers in print, TV, radio, out-of-home, etc. And I went and talked to folks at the technology vendor companies who supported advertising in all of these spaces. It was clear to me that converging the process was possible, and as I looked at how the various channels operated, it was also clear that they'd benefit significantly from a more modern architecture and approach.
But in 2005, the idea of digital media technologies and approaches being used to "fix" digital media was clearly too early. It would be like AOL buying Time Warner…Oh yeah, that happened. In any case, the likelihood of getting traditional folks to adopt digital media ad technology in 2005 was simply ludicrous.
And despite progress, and clearly superior technical approaches in digital (if lower revenue from the same content due to business model differences), there's little danger of traditional and digital media ad convergence in the near term. This is actually a real shame because digital media now is stepping into a real renaissance from an advertising technology perspective.
Programmatic media buying and selling is clearly the future of digital, and I believe they will extend into traditional as well. And within programmatic, RTB is a clear winner (although not the only winner) in the space. The value proposition of RTB for the buyer is incredibly strong. Buyers get to deliver ads only to the specific audiences they desire and on the specific publishers (or group of publishers) they want their ads associated with. While still mostly used for remnant media monetization, this is changing very fast.
Television is the obvious space to adopt digital media ad technology, and with terms like "Digital Broadcast," "Digital Cable," "IPTV," and others, it would seem on the surface that we're moments away from RTB making the leap from online display ads and digital video to television.
That's not quite the case. While great strides are being made in executing on targeted television buys by fantastic companies like Simulmedia, Visible World, and others, this space is still not quite ready to make the transition to real-time ad delivery (what we think of as ad serving in the online space) at large, let alone RTB.
This is because the cable advertising industry is hamstrung by an infrastructure that is designed for throughput and scale of video delivery, which was absolutely not designed with the idea of real-time decisions at the set-top-box (STB) level in mind. Over the years we've seen video on demand (VOD) really take off for cable, but even there, where the video content is delivered via a single stream per STB, they didn't design the infrastructure around advertising experiences. Even the newer players with more advanced and modern infrastructures and modern-sounding names like IPTV, such as Verizon's FIOS solution, haven't built in the explicit hooks and solutions needed to support real-time ad delivery decisions across all ad calls. That basically means that for the vast majority of ads, there's no targeting whatsoever.
Some solutions like Black Arrow and Visible World have done the work to drop themselves into the cable infrastructure for ad delivery, but nobody has seen massive adoption at a scale that would let something happen at the national level. And the cable industry's internally funded advanced advertising initiative -- The Canoe Project -- laid off most of its staff last year and has focused on delivering a VOD Clearinghouse to get VOD to scale across cable operators. So in 2013, we're still not to the point where dynamic video advertising can be delivered on any television show during its broadcast, and even VOD doesn't yet have a way to easily, cohesively, and dynamically deliver video advertising -- let alone providing an RTB marketplace.
On the non-RTB side of programmatic buying and selling, I think we'll see a lot of progress here in traditional media. Media Ocean has been doing their own flavor of programmatic for quite some time -- in fact the Media Ocean name of the post-merger company was a product name within the Donovan Data Systems (DDS) portfolio that helped bind together the DDS TV Buying Product with a Television Network selling product and allowed buyers and sellers to transact on insertion orders programmatically for spot television. With Media Ocean's new focus on digital media (which is getting rave reviews from folks I've talked to who have seen it), there's little doubt in my mind that these products will extend over to the traditional side of the market and ultimately replace (or be the basis of new versions of) the various legacy products that allowed DDS to dominate the media buying space for decades.
If our industry can get to the point where executing media buys across traditional and digital share a common process until the moment where they diverge from a delivery perspective, I think the market overall will make great headway. And I'm bullish on this -- I think we're not far away but it won't happen this year.
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