By Alexandra Bruell and Jeanine Poggi, Advertising Age
In case you missed it, IPG’s Mediabrands’ Magna group became the latest to promise to shove the TV and radio ad business out of "the Mad Men days of the 60s" as the Wall Street Journal put it, into the digital age.
The consortium includes a handful of niche cable networks, a local cable operator, as well as some holders of broadcast TV and radio stations. In a press release, IPG called it: "an integrated programmatic-buying business model to drive critical automation advances across all media transactions."
But wait, what does all this mean?
First, a bit of what it doesn’t mean: We’re not talking about automated auctions, the kind Google tried through Google TV Ads a few years ago. In fact, no one at Mediabrands expects TV money to actually flow through this system.
Kristi Argyilan, president of Magna North America, said that at the moment there’s no new platform or technology to go along with the announcement. Rather, the company is using its existing data package to figure out how best to "value media inventory" and apply that knowledge to "buying decisions we’re making so we know we’re driving target audience to more precise business outcomes."
When asked if this means that new system is more of a "programmatic planning" approach than a "programmatic buying" model, she said yes.
So, what does it mean? It’s a planning tool to allow Mediabrands and clients to buy TV more intelligently.The agency network, which oversees both UM and Initiative, has inked partnerships with companies that can provide it with access to better data so that they can compile more targeted media plans. They’ll then buy digital media through existing trading desks, online ad auctions and yes, by email and phone, and continue to negotiate with the TV channels’ sales teams to buy broadcast inventory.
Who’s in? The partners include: A+E Networks, AOL, Cablevision, Clear Channel Media and Entertainment and Tribune. The big broadcast networks — the ones that command the most Upfront dollars — are conspicuously absent. The WSJ reported the group is in talks with media companies like NBC Universal, among others, to add to the consortium and secure exclusive inventory. An NBC Universal spokeswoman told Ad Age that while NBC is not part of the consortium, it is supportive of the efforts and NBC Universal is waiting to see where it’s headed.
"The intent is to have prime time as part of discussion but we have not gotten to the point of having inventory commitments from partners," Ms. Argyilan said.
Who’s providing the tech? For the time being, Magna will use AOL’s Adap.tv platform to build out this planning function.
Does this mean TV is going "programmatic? No. The landscape is littered with failed attempts to merge legacy TV ad buying systems with existing digital technologies. That scenario for both digital and broadcast is still years off and probably won’t happen until the bulk of TV viewers in this country use smart TVs or two-way, web-enabled digital cable boxes. The reason is because cable TV still flows through the MSO’s propietary, gated systems, according to Scott Hagedorn, CEO of Omnicom Media Group’s Annalect Group. "[Cable companies] don’t have the bandwidth ready, or an ad serving system, that can deliver into the household in a dynamic way where they can embed [creative advertising] into the in-stream programming."
Will machines replace people? "We expect to see an elimination of tasks, those that should be automated vs manual," said Ms. Argyilan. "We also believe this will create different opportunities. For example, there will be increased need for analysts who can evaluate the near time information that is coming in and suggest changes as a result."
Um, hasn’t this been tried, a lot? Brian Wieser, analyst at Pivotal Research Group (and former Magna exec), pointed to failed attempts by eBay, Google’s TV ads and Navic in offering similar approaches to accessing TV inventory in years past. dMarc, which was acquired by Google, SWMX and Bid4Sports all made efforts to drive automation into radio ad sales, and were eventually shelved, due in part to the limited access to inventory.
"A traditional TV sales group is no better able or willing to sell individual impressions because of this news than they were before," he said. "Further, no ad sales group of any scale will want advertisers to cherry-pick individual impressions."
But isn’t it important to try? "The most important near-term take-away, in our view, is that Magna and its sibling media agencies UM and Initiative, which all operate under the umbrella of Mediabrands, remain highly focused on creating a differentiated offering that they can pitch to current and prospective clients," he said. Given the current scale of competitors like WPP and the soon-to-be-combined Omnicom and Publicis, an emphasis on smarter buying is essential."
Aren’t other holding companies doing similar initiatives? Mr. Hagedorn said that like Mediabrands, OMG is also in talks with Adap.tv — an ad tech company recently acquired by AOL – and has already tested Adap.tv’s data-management- and demand-side-platform in OMG’s environment. Last quarter, he said, the company began testing automatic buying for digital properties such as video and out-of-home, moving small amounts of client dollars through the platform. And like Mediabrands, he said the agency group is also talking to Comcast and conducting similar tests with companies like Clearchannel, Spotify and Hulu.