VIEQUES, PR — As the technology used for trading display ads programmatically has made in-roads in to digital video, many in the industry also expect the same thing to happen in good ‘ol television.
But hold your horses. Whilst many tech vendors are trying to usher a tradable marketplace economy in to television ad buying, the current system – in which 90% of US TV ad dollars are actually agreed way before transmission – is not going away any time soon, according to one video ad-tech exec.
“Do the ‘upfronts’ continue in the television world?,” asks Videology chief revenue officer Ryan Jamboretz, in this recorded panel interview with Beet.TV. “The whole balance of the TV content system works off the back of futures.
“Upfronts play a very fundamental world in how a scarce market trades. When you have a scarce asset that people need, they are willing to pay for a futures contract to take some of it off the market.”
The 2017 US Upfronts and NewFronts season, in which TV networks and digital publishers tout their upcoming content roster in a bid to secure ad spending, began early in March and is set to continue through to mid-May; here is the calendar.
And Jamboretz thinks the whole construct remains critical. The opinion represents a maturation of the view in video ad-land, where many vendors, early on, had enthusiastically believed they could make the same in-roads in TV as they are in video.
eMarketer forecasts 69% of US digital video display ads will be transacted programmatically in 2017. But the proportion remains only a fraction for traditional TV.
There is one good reason for that – most of TV is still broadcast over analogue or otherwise linear channels, with little opportunity to customise ads. Even if that is overcome, as more internet TV boxes are plugged in, vendors are coming to realise, that doesn’t mean TV networks will consent to their intrinsic ad sales model being changed under their feet.
“If you are a retailer and you need to advertise on Thanksgiving Day weekend, or if you are a media seller and you want to take 30%, 40% or 50% of your inventory and sell it at the upfront of the year so that you can fund content… that’s not just a nice-to-have, that’s a must-have,” Jamboretz added.
This interview with conducted by MediaLink managing director Matt Spiegel.
This video is part of a series produced at the Beet.TV Executive Retreat in Vieques. The event and series is presented by Videology and 605. For more videos from the series, please visit this page.