By Matt Barnes, Marc Mallet
Consumption of long-form premium content has undergone a massive transformation in the digital age. Technology has given consumers the ability to watch what they want, where they want, whenever they want. Simultaneously, advertising technology has also allowed marketers to identify, target, and surround their audiences in these digital-first environments.
Through all this change, one thing has remained constant: sports and live events are important types of programming that have proven to be immune to time-shifted viewing. However, the reliance on programmatic-buying technology in digital media environments and consumers' ability to control viewing behavior are forcing an overhaul in the way the industry plans and executes media.
The Evolution of Programmatic Media Buying
During its infancy, programmatic advertising consisted mainly of remnant inventory, which publishers monetized through automated technology. As the business matured, the industry shifted toward a more premium exchange consisting of a one-to-one connection between brands and publishers in private marketplaces.
Today, advertising is entering an age in which programmatic is the preferred transaction type, allowing advertisers the ability to access the most premium content in the industry through automated pipes. However, this evolution does not come without its fair share of challenges. Media buyers have had the luxury of consistently finding their audiences whenever and wherever they were in market. This model still mainly holds true for time-shifted premium long-form video (i.e., full episode programming), short-form preroll video, and display-at-large, but with sports and live events, where the viewing is predominantly consumed during a specific date and viewing window, the model creates a host of challenges that the technology was not originally built to accommodate.
Programmatic technology has continued to evolve over the years as media offerings get more complex, shifting from display to preroll video to today's full TV-like experience of the connected TV (CTV) and over-the-top (OTT) streaming space. Demand-side platforms (DSPs) were built to find specific audiences across the internet via evenly paced bidding algorithms during an advertisers' campaign. The main objective of supply-side platforms (SSPs) consisted of exposing publishers' inventory in their exchange with connections to as many DSPs as possible to monetize their inventory. Where this approach breaks down is during the introduction of premium event-based programming. With sports and other live events, ad impressions are no longer evenly distributed over a specific time period, but instead are concentrated in three-hour windows during specific days of the week.
Take, for instance, a weekend in the fall where college football and the NFL are in full swing and the NBA and NHL are kicking off their seasons. An average weekend will include 240 hours of nationally televised sports events across nearly 20 networks, according to data gathered from Nielsen Media Research. Arguably, this inventory holds the most premium ad impressions in the market today.
Live events deliver engaged audiences at scale — of the top 100 viewed telecasts in 2018, virtually all were live events. These audiences require a different frequency strategy. During a three-hour sports event, viewers were generally averaging an hour of viewing, per Nielsen.
Using the same bidding strategies that are successful in the display and preroll video space will not prove successful when applied to live events. With more than 70 percent of live consumption on Disney/ESPN happening on CTV/OTT devices, according to Nielsen, programmatic transactions provide publishers the ability to marry data and automation to one of their most premium assets.
Rewriting the Playbook with Programmatic Technology
Both demand- and supply-side technologies have done a good job adapting to the complex space of programmatic advertising. During early days, live event programming would be flagged as fraudulent inventory by DSPs. (To be fair, DSPs would see limited impressions from a publisher, and then when a college football game would kick off, inventory would go through the roof. This type of volatile inventory would be misconstrued as fraud.) On the flip side, SSPs were not sending out the right flags to alert bidders that an actual live event was in progress and that the inventory was valid. Today there is a clear flow of communication between the buy side, sell side, and publisher, resulting in a big opportunity for advertisers to reach key audiences.
What if the industry approached things differently? What if instead of looking at programmatic as a tool to monetize unsold inventory, advertisers looked at this as an opportunity to capitalize on publishers' most premium assets? What if buyers were told they could set up deals and simply target the biggest viewing windows in college football on Saturday nights in the fall? Through real-time bidding and automation, what if brands were more easily able to capture lightning-in-a-bottle moments?
Reconsidering how programmatic technology might advance and how advertisers might use it can lead to endless possibilities, but what would not change is the value for advertisers when the best content is married to their ability to deliver the right message to the right user at the right time.
As publishers put another broadcast upfront behind them and turn an eye toward the fall, programmatic buying is going to continue to make a push to the forefront of the advertising industry. The benefits of audience and automation on both sides of the desk are a sign of a bright future for a product that was once looked at as a way for publishers to monetize their remnant display inventory.
Matt Barnes is the senior director of programmatic sales and strategy and Marc Mallet is the VP of performance advertising, both at the Walt Disney Company, a partner in the ANA Thought Leadership Program.