Programmatic TV: ‘Irrational fear’ it will mean a race to the bottom on price

Harty (right): 'There's money being spent wholesale on crap like cat videos'

Harty (right): ‘There’s money being spent wholesale on crap like cat videos’

Programmatic advertising in Asia is challenged by a paucity of quality content and an “irrational fear” that automation will mean a race to the bottom on price when TV ads are bought by machines in this region, it was suggested during a panel debate in Singapore last week.

Moderating a panel on the programmatic opportunity for broadcasters at the Content Asia Summit, Wendy Hogan, a former Interactive Advertising Bureau Singapore chair who recently joined Oracle, suggested that what scares media owners about automation is yield, and that when television advertising is traded programmatically in Asia, as the panel agreed was inevitable, content will become commoditised and prices will tank.

Charles Less, the head sales for A+E Networks Asia, the TV network behind shows such as MasterChef Asia, said that it was down to broadcasters to “take control” of their inventory if they were to tell it programmatically, and avoid selling it “on the cheap”.

“Any programmatic we do now, we have control of the price. We have a value and we should keep the value,” he said while acknowledging that the programmatic trading of television is some way off in Asia, and is only just taking hold in more advanced markets such as China and Australia.

Matt Harty, Asia SVP at The Trade Desk and formerly the head of the online advertising business for TV network Fox across the region, said there is an “irrational fear of price” when it comes to programmatic trading, and said that prices of programmatically traded online video have increased not fallen.

The programmatic advertising industry began in Asia in 2011, and since then prices have climbed “significantly” Harty noted.

“In most markets, prices have tripled over that period of time, and we’re certainly not seeing any downward pressure.”

The fear of inventory losing its value comes from the worry that the media owner’s content is of poor quality, Harty suggested.

“If I’m sitting on crap content and other people have good content, I’m going to be rewarded less,” he argued.

“There’s a significant amount of money being spent on amateur stuff. There’s money being spent wholesale on crap like cat videos,” Harty pointed out.

L-r: Wendy Hogan, Sanchit Sanga, Matt Harty, Charles Less and Basil Chua

L-r: Wendy Hogan, Sanchit Sanga, Matt Harty, Charles Less and Basil Chua

Representing the buying side of the business on the panel was Sanchit Sanga, the chief digital officer for Asia’s largest media agency, Mindshare. He proposed that media owners tend to lose sight of the value of their content when they put it on the internet.

“From my experience with broadcasters, they don’t value their own content when it goes online. But if anything, inventory that has data sets attached to it should be sold at a much higher cost than traditional television – and we’re willing to pay that premium,” he said.

He also highlighted the issue of poor quality inventory available for advertisers, and addressed an even bigger worry for brands raised by Charles Less – that their ads will end up in inappropriate places.

“There is a massive need on the demand side to get quality inventory. When we buy programmatic we are operating at 70% of our programmatic investments going on open exchanges. Which is not because we consciously chose that, it’s because the inventory isn’t available for us to buy any kind of quality irrespective of price.”

“Price is not a barrier currently. There is a paucity of content which we can access. But that number should be reversed; 70% should be on the reservation of transparent marketplaces instead of 70% on open exchanges,” he said.

Hogan later threw the panel an awkward question from the audience of mainly broadcasters about whether programmatic advertising could be deliberating supporting piracy, as pirate sites offer advertisers large and growing audiences.

Harty said this was completely untrue, and that anyone caught doing this would lose their job. He said there were third party companies “whose only job is to ensure that the ads don’t end up somewhere inappropriate.”

However, Sanga added: “There is no full-proof way [to avoid ads ending up on inappropriate sites] unfortunately. We use four verification companies before we release an ad, but still there are instances where ads end up on suspect sites.

Last year, ads for bluechip brands including Toyota, P&G, POSB Bank and, ironically enough, pay-TV operator Singtel were found on illegal streaming sites.

Hogan also asked the panel if they thought that programmatic had been over-hyped by the industry. Less, who inadvertently used the word “problematic” when talking about programmatic during a panel debate two months ago, suggested that some companies had been “over-relying” on the hype, and that there was a “time and a place” for it within the media mix.

Sanga, who admitted he was a “slightly biased”, concluded: “Programmatic is imminent. Automation is imminent. Hype or no hype, it is imminent. So we have to embrace it.”


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