In the current programmatic environment,

where so much publisher data has been made

available to ad buyers, publishers are faced

with a dilemma: How can they best strike a

balance between their needs and those of

their buyers?

In this exploration of the sell side delving

into programmatic, we will examine

how premium publishers are balancing

programmatic and direct sales, how they

are using programmatic to monetize OTT

content and what programmatic tools they’re

using now, all in the interest of leveling out

control between themselves and the buy side.

01INTRODUCTION

Based on a sponsored article seriesthat originally appeared on DIGIDAY

Bridging the direct-programmatic divide: How holistic platforms unify efforts

Publishers increasingly inhabit a world where revenue is divided between direct and programmatic channels, but programmatic won’t fully replace direct sales any time soon. Finding a way for the two sides of the revenue equation to coexist is critical when every drop of revenue and every iota of efficiency counts toward the bottom line. Delving into specifics, programmatic has swallowed up nearly two thirds of all US ad spend according to eMarketer, but direct still captures nearly $11 billion in ad spend. The challenge is a bit of a left brain/right brain one: Programmatic requires a systematic analysis of A/B testing and advertising optimization. Meanwhile, direct sales are still all about the personal relationships that have greased the wheels of media for decades. To efficiently straddle both worlds, progressive publishers are experimenting with a new crop of holistic solutions that will allow them to efficiently manage both sales methods simultaneously.

THE TWO-TEAM APPROACH

Many publishers have to maintain separate teams to manage each channel. At AOL, for example, sales are essentially divided into two, different groups. The managed media team mostly focuses on direct sales, but even that “doesn’t mean they won’t get involved in programmatic conversations,” said Geoff Dodge, head of sales productivity at the company. “At AOL, we’re doing a lot of team selling now.” This means assessing customers for where they’d fit best, whether it’s direct or programmatic–or a bit of both. The challenge therein, Dodge explained, is understanding the client “in a world that moves at the speed of light.” The current pace

of the industry makes it difficult to present custom solutions to advertisers, especially when those solutions might straddle direct and programmatic…and therefore two different ad sales teams.

THE WATERFALL METHOD

Then there’s the “waterfall” method of ad sales, which lets publishers offer up their inventory to demand sources in order of their profit potential, starting, of course, with the highest revenue option. This bulk approach to ad sales may not be the most nuanced, but it is still a popular way to make the most money off otherwise unsold inventory. And thanks to technology, it’s getting easier and easier to execute. “If you look at some of the software companies that are now dipping their toes into this space, it is very clear that it’s only going to get more technology driven,” said Dodge. “The amount of space being purchased directly continues to go down every year, and the amount of space purchased programmatically continues to go up. It’s hard to stop this trend.”

If you look at some of the

software companies that are

now dipping their toes into

this space, it is very clear

that it’s only going to get

more technology driven.”

“

03

THE BEST OF... ONE WORLD?

Other publishers have avoided the balancing act altogether. AwesomenessTV, for instance, has held off on adopting programmatic. However, the company is ready to hop on the bandwagon, and it’s figuring out how to negotiate the shift. “We’re not committing to one model, so as to be flexible for our clients and responsive to the market,” Paul Kelly, AwesomenessTV’s chief partnership officer, explained. That position is another sign that publishers are increasingly looking for flexibility and a way to efficiently shift between programmatic and direct-sold advertising.

THE BENEFITS OF A HOLISTIC APPROACH

Among the many challenges with taking a divided approach to managing direct and programmatic is that details slip through the cracks. The burden of coordination and communication adds a layer of complexity and cuts into publishers’ ability to convert inventory into cash. To avoid this, some publishers merge the management of programmatic and direct, integrating the two into one–a holistic strategy. The holistic approach essentially puts management of all a publisher’s ad sales in one place, so there’s no straddling the two worlds or bouncing information back and forth between direct and programmatic sales teams. Rather, a single dashboard tracks the publisher’s budget, available ad space, current customers, and analytics.

Publishers juggling multiple deals, both direct and programmatic, aren’t only looking for ways to simplify management—they’re also aiming to streamline the sales process itself and to maximize revenue. A holistic approach allows direct and programmatic sales channels to compete for inventory. That direct competition and the holistic decisioning engine drive maximum CPM and fill, while taking into account direct campaign flighting requirements as well as tight brand controls ensuring the highest quality combination of performance.

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The publisher practice of offering up impressions to a descending series of demand sources in order of value

holistic ad platform

A platform that allows publishers to manage their direct and programmatic ad sales in one place.

CPM “Cost per Thousand;” it signifies the cost of 1,000 impressions on an advertisement

Managing both programmatic and direct

sales from one holistic ad platform can help

publishers take charge of their inventory

and maximize CPMs. Now they just have to

be able to translate this ability to all of the

platforms where they’re releasing content.

That includes the rocky landscape of over-

the-top programming, where programmatic

accounts for an increasing number of

ad transactions. According to eMarketer,

programmatic made up about 39% of digital

video ad spend in the US in 2015, and

enthusiasm for the automated method

isn’t waning.

02ON OTT

From OTT platforms to publishers: Here’s how to make money

Bringing advertisers to OTT platforms hasn’t been historically easy. “From the beginning…there really wasn’t a lot of demand from the buyer side,” said Kenna Ranson, the director of ad products and revenue at the anime focused Crunchyroll, which has been in the OTT space for an impressive 10 years. That long ago, TV was still the only real attraction, but buyers have long since seen the appeal in OTT platforms. In the last six to 12 months particularly, Ranson has seen a “huge surge” in advertisers moving their dollars over to OTT, and the forecast is for this momentum to continue. Still, fragmented audiences and a lack of “clicks” to track their behavior on OTT platforms presents challenges for publishers looking to cash in on the medium. How can publishers grab up those dollars and take control of their revenue futures in this still growing space? Execs from OTT platforms have some ideas. “FUNNEL” VIEWERS FROM FREE TO PAID PREMIUM

Crunchyroll offers both a free, ad-supported (AVOD) and a paid, premium (SVOD) service, and Ranson calls the former “a way to encourage folks to subscribe” to the latter. Faye Walker, senior vice president of marketing OTT networks at Cinedigm, which manages AVOD/SVOD channels like Con TV, described this tactic, “We use AVOD service as a funnel to convert customers to SVOD.” You can trust Walker’s advice because she’s following it. Cinedigm’s Docurama, which for a while only operated an AVOD service, launched a $4.99/month subscription service on Amazon Prime earlier this year. Walker admitted that operating a subscription service is “cleaner and

easier” than the “challenging” ad-supported alternative. If publishers can manage to guide customers through the AVOD to SVOD funnel, they’ll have a smoother time managing revenue and better control over monetization. OVERCOME THE “CHALLENGE” OF AD-SUPPORTED

While subscriptions are the holy publisher grail—offering a “cleaner and easier” revenue stream—the ad-supported business is likely to grow as more money flows toward programmatic TV buying. Plus, ad-supported is oftentimes what leads users to subscribe to publishers’ OTT content in the first place. To manage the more “challenging” ad-supported alternative, Cinedigm employs a programmatic ad platform. The technology allows them to bridge both the content and the device divide. This divide also affects publishers’ ability to collect information on their audiences. As a result, advertisers often gain an upper hand in OTT because audience demographic information can be limited. “The one push-back that we often get from advertisers is that there’s not a lot of data,” Ranson explained. It’s not easy for publishers to collect this data, but there are ways. AD SERVERS KNOW YOUR AUDIENCE

Warner Bros., which oversees ad sales for a number of TV properties gone OTT—like DramaFever’s Korean soaps—uses different measurement tools across devices to gather data.

06

Nonetheless, the company’s SVP of national sales, Chris Lindquist, said, “We’re able to get parity across Roku, connected TV, and mobile and tablet all through our one ad server.” Essentially, programmatic lets Warner Bros. collect robust information on gender, age, and other general demographics as well as assess the connection between their OTT and linear viewership. SHOW BUYERS THAT DIFFERENT PLATFORMS MEAN DIFFERENT AUDIENCES

Warner Bros. OTT content all grew up on linear TV, where advertisers easily understand the value of their audiences. Lindquist calls this is a “natural alignment,” making it easier for these advertisers to move with TV shows to OTT destinations. But buyers still have to understand that OTT viewing is different from TV viewing, and the audiences aren’t identical, either. They merit unique ad experiences. DramaFever, for example, consists of multiple Korean properties with TV origins, spread across various Korean channels. With this content all available in one place and accessible online, advertisers are “connecting with a whole new, broader subset,” said Lindquist, who works with both direct and programmatic sales teams at Warner Bros. Crunchyroll’s Ranson believes that giving publishers control in OTT means they must “really empower and educate [their sales] teams” on “what the value propositions are” for advertisers. For Warner Bros.’s DramaFever, that value proposition is the large set of very passionate 13 to 34-year-old females who represent “a cross-section of America” when it comes to ethnicity and race—as opposed to the original Korean viewers of DramaFever’s content on TV.

TAKE ADVANTAGE OF THE TECH While Warner Bros. focuses heavily on direct sales, they use programmatic tools to help round out their inventory. Many of their properties, along with other OTT “channels” like Crunchyroll, operate both AVOD and SVOD services across many platforms. “We have different [advertising] partners for different devices…and different geographies,” said Ranson of Crunchyroll. Managing multiple revenue models in an OTT environment requires serious organization, and it can take a beyond human capacity to do it.

Thus, publishers are increasingly turning to technological tools to help them holistically manage their relationships with advertisers, such as those that help SSPs better interact with their DSP partners. “Working with the right partners is critical, especially when it comes to services like ad-delivery and management,” noted Gaurav Gandhi, COO of Viacom 18 Digital Ventures, which operates Voot, an ad-supported OTT service. To really take charge in the OTT space, publishers need to make sure their ad game is on point and promote upcoming industry standards like VAST 4.0 which help a publisher’s player or ad server accept the right ad in the right creative format for many OTT applications. Leveraging their unique data position to inform smarter dynamic ad insertion, publishers can help match ads to content and viewers, delivering a more personalized experience beyond what linear TV can offer and ultimately, maximizing revenue. Fortunately for publishers, as the OTT landscape matures, so do the tools of monetization.

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“Over-the-Top;” denotes the online delivery of video content without a cable or satellite subscription

AVOD A free, digital Ad-Supported Video on Demand service

SVOD A digital Subscription-Based Video on Demand service

Ad server A technology service that places ads on publishers’ sites and tracks the ads’ success

SSP “Sell-Side Platform;” where publishers plug in their online ad inventory and sell it to buyers DSP “Demand-Side Platform;” essentially the opposite of an SSP, a platform through which advertisers can purchase ad space on publishers’ sites programmatically

VAST 4.0 “Video Ad Serving Template;” an ad serving template that delivers ads to digital video players under certain standards specified by the Interactive Advertising Bureau; 4.0 is the latest of six versions

08

With viewers’ favorite media distributed

across screens of different sizes and mobility,

all platforms need consideration when it

comes to publishers planning out their

programmatic strategies. As executives

at OTT publishers revealed, ad-supported

services are instrumental in turning audience

members to subscribers. Determining

how to deliver those ads oftentimes begs a

programmatic solution.

Such a solution can take the form of various

programmatic tools, from automated

guaranteed to ad reinsertion. Some premium

publishers are already using these tools, while

others are considering stockpiling such tools

in their programmatic arsenals.

03PUBLISHER ARSENALS

The new programmatic arsenal: How Turner, The Economist are beefing up their approach

Premium publishers and broadcasters have been long aware that programmatic sales is an integral part of their ad strategy. Turner, for instance, has been more heavily focused on aligning its direct and programmatic sales teams “over the last eight or nine months,” said Nick Johnson, senior vice president of digital ad sales strategy for Turner Ad Sales. Having moved far beyond the basics of exchanges, publishers are now concentrating on how to take advantage of the methods that have come to the fore this year: automated guaranteed and ad reinsertion.

AUTOMATED GUARANTEED: HOW PUBLISHERS CAN MAKE INTIMACY EFFICIENT

“As clients get ready to adopt programmatic technology, we are a huge proponent of the automated guaranteed marketplace,” said Michelle Zitz, director of global data solutions at The Economist Group. It makes sense when you listen to her explain the tedium of a manual direct sales workflow. “Think about the amount of time that gets spent responding to an RFP and going through different versions of Excel spreadsheets and sending things back and getting approvals and making tweaks and getting things booked directly and getting tagged… et cetera,” she said of the painstaking journey.

Automated guaranteed, a type of programmatic advertising that mimics a direct sale to a client but automates the process, has helped make this journey more efficient for The Economist Group while allowing the publisher to maintain intimate relationships with clients. The sales team still gets to work one-on-one with each buyer—they just get to do it faster. “Being able to use a platform that can really simplify [this process] is a huge benefit,” said Zitz. “Simply from a logistics perspective, that is a fantastic way to improve day-to-day operations and workflow directly with the client.” Looking to the future, Zitz wants to see automated guaranteed bring even more ease to the ad sales process. This would “promote buying on clients’ first party audiences” and sharing that premium inventory in a more efficient way, saving time for both the buy and the sell side of the equation.

Simply from a logistics

perspective, that is a

fantastic way to improve

day-to-day operations and

workflow directly with

the client.”

“

10

AD REINSERTION: HOW PUBLISHERS CAN OVERCOME THE BLOCK

It’s an uncomfortable subject for publishers, but ad reinsertion—which lets publishers put advertisements back on their platforms where they were removed via ad blockers—is a legitimate tool in the monetization arsenal. In order to reinsert ads without compromising audiences, however, publishers have the responsibility of getting to know their audiences to the point where the ads they reinsert are relevant enough not to feel intrusive and, when it comes to video, the number of ads doesn’t become too overwhelming for the viewer andthe content. Johnson from Turner understands why publishers and broadcasters need to be so careful. “We know that younger audiences are not necessarily fans of conventional advertising, at least as it relates to the display, and that ad blocking and human traffic and fraud are all very real thingsthat we need to contend with,” he said. While publishers contemplate contending, they must face up to the revenue they’re missing out on thanks to ad blocking. “Whether it’s five or 30 percent,” said CBS Interactive’s chief revenue officer, David Morris, “we’re still losing those impressions. Even the small losses add up.”

TAKING ADVANTAGE OF THE ARSENAL

Publishers can—and are successfully—wrangling programmatic with tools that make it increasingly profitable to sit on the sell side of the advertising equation. One of the keys to realizing the potential of these tools is simply being open to them. After all, why dismiss any opportunities for potential increases in sales revenue?

“There’s a lot of innovation happening,” said Johnson, “so it’s our intent to really make sure that we’re taking a good look at what’s available out there and making sure that we are working with technology partners that help us with our objective…which is maximizing revenue yields and growth.” When all is said and done, taking advantage of programmatic comes down to publishers looking out for the bottom line.

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A programmatic ad sales process by which the sale is made directly between buyer and seller but the ad placement process is automated

ad reinsertion

A programmatic ad serving method that puts advertisements back in places where they have been removed by ad blocking software

RFP “Request for Proposal;” often issued by brands seeking out agencies to bid on projects that brands cannot complete in-house

Programmatic doesn’t have to mean that

publishers must give up their data to buyers

without any guarantees of making a profit.

Rather, publishers can overcome the

potential uncertainties of this automated

landscape with tools that let them balance

between their direct and programmatic

inventory, make programmatic work for their

OTT channels, and allow them to maintain

the positive aspects of direct sales while

improving them with the ease and speed

of digital. Ultimately, programmatic tools

can empower publishers to remind buyers,

“You’re advertising with us because we bring

the audience.”

It is time to restore balance to the ad sales

equation by equipping publishers with the

programmatic knowledge that will help them

work best with the buy side. It’s time for them to

put together their own programmatic toolkits.

CONCLUSION

Ooyala helps deliver content that connects. A US-based subsidiary of global telecommunications and IT services company Telstra, Ooyala’s comprehensive suite of offerings includes one of the world’s largest premium video platforms, a leading ad serving and programmatic platform and media logistics solution to improve video production workflows. Built with superior analytics capabilities for advanced business intelligence and a strong commitment to customers’ success, Ooyala’s industry-leading end-to-end solutions help large-scale broadcasters, operators, media companies, enterprises and brands build more engaged and more profitable audiences, and monetize video and TV with personalized, interactive experiences across any screen. NBCUniversal, Star India of 21st Century FOX, Sky Sports (U.K.), ITV Studios (U.K.), RTL Group (Germany), M6 (France), TV4 (Sweden), Mediaset (Spain), America Television (Peru), and Media Prima (Malaysia): these are just a few of the hundreds of broadcasters and media companies who choose Ooyala. Headquartered in Silicon Valley, Ooyala has offices in New York, Dallas, London, Chennai, Stockholm, Sydney, Tokyo, Singapore, Cologne, Madrid, Paris and Guadalajara, and sales operations in many other countries across the globe.

This report is based on a series of sponsored articles that originally appeared on Digiday.com. Digiday, a division of Digiday Media, is a leading modern media publication and events company, a daily must-read among influencers obsessed with the bleeding edge of media and marketing.

Produced for Ooyala and Digiday by CUSTOM, a Digiday Media Agency.

DIGIDAY

www.ooyala.com sales@ooyala.com

www. ooyala.com sales@ooyala.com

Ooyala delivers content that connects. A US-based subsidiary of global telecommunications and IT services company Telstra, Ooyala’s comprehensive suite of offerings includes one of the world’s largest premium video platforms, a leading ad serving and programmatic platform and media logistics solution. Built with superior analytics capabilities for advanced business intelligence and a strong commitment to customers’ success, Ooyala’s industry-leading end-to-end solutions help large-scale broadcasters, operators, media companies, enterprises and brands build more engaged and more profitable audiences, and monetize video and TV with personalized, interactive experiences across any screen. Vudu, NBCUniversal, Star India, Sky Sports (U.K.), ITV Studios (U.K.), RTL Group (Germany), M6 (France), TV4 (Sweden), Mediaset (Spain), America Television (Peru), and Media Prima (Malaysia): these are just a few of the hundreds of broadcasters and media companies who choose Ooyala. Headquartered in Silicon Valley, Ooyala has offices in Chennai, Cologne, Dallas, Guadalajara, London, Madrid, New York, Paris, Singapore, Stockholm, Sydney, Tokyo, and sales operations in many other countries across the globe.

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SELL, TARGET, DELIVER

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