OMG Announces First-Mover Partnership With OpenAP
This article was originally published by The Wall Street Journal.
TV network group OpenAP is updating its technology to let advertisers see the commercial time that is available from its members, making its system more closely resemble digital ad platforms.
The organization, whose members include competitors such as Comcast Corp.’s NBCUniversal, Fox Corp.’s Fox and ViacomCBS Inc., has been working to build a system that automates and improves the antiquated trading process for TV ad buyers and sellers.
The latest launch is a supply-side platform, which is software typically used by digital publishers to automate the sale of their ad units.
OpenAP’s SSP comes as advertisers look for more efficient ways to buy targeted TV commercials throughout their campaign, and publishers try to peel back ad dollars from digital giants that have gained a greater share of advertisers’ budgets.
“Agencies have been investing in data products and optimization tools but those tools lack transparency from the sell side,” said David Levy, chief executive of OpenAP. “It gets us to a lot more efficient buys so you have less waste.”
The SSP is different from OpenAP’s existing OpenAP Market product, which allows an ad buyer to use historical TV data to create a plan. Advertisers using OpenAP Market need to work directly with individual TV sellers to see and select the commercial inventory intended to reach their consumers.
Advertising holding company Omnicom Group Inc. worked with OpenAP to test and launch the SSP. Omnicom, which owns media agencies OMD, PHD and Hearts & Science, plugged its data and planning system, Omni, into OpenAP’s SSP. It can use its own data sets or data sets it builds through OpenAP’s system to plan which inventory will best target its consumers and then place orders for specific commercial units. An order doesn’t necessarily reserve the inventory. The TV seller is expected to respond to a buyer within 24 hours to confirm the order. If an ad unit isn’t available, the publisher will likely come back with a comparable ad unit.
A marketer trying to reach people who are in the market to buy a car, for example, can use the system to find the shows on various networks that attract a relatively high concentration of them, according to Mr. Levy. The system will then allow buyers to see available commercial inventory from OpenAP’s TV networks that meets the criteria.
“We’re crawling in one way and in another way it’s a giant leap in the sense that we’re moving closer on behalf of our clients to be able to treat linear TV much like we have in the past with digital,” said Matthew Kramer, managing director of advanced advertising for Omnicom Media Group.
The SSP will be most useful in the scatter market, he said, referring to the time when the TV season is in full swing and buyers purchase ads closer to when shows run, as opposed to making upfront purchases well ahead of time.
This is not the first SSP for traditional TV, and the quality of the inventory that networks will offer through the system remains to be seen, he said. Still, it is expected to lend the agency group more control over the process, including the ability to use its own data segments inside Omni to select and order inventory and optimize a plan, he said.
Once ad buyers select and reserve inventory provided through the SSP, they will still need to work with the individual sellers and use traditional insertion orders to complete transactions.
For a time, OpenAP was working toward creating a system that would fully automate the TV ad market, from planning to completing a transaction. Now, OpenAP is more focused on facilitating data-informed TV ad deals, said Mr. Levy.
There is more opportunity in enabling the purchase rather than owning it, he said.
“There’s already a baked-in market for commitments between agencies and publishers, and instead of focusing on trying to either take money outside that market or introducing new money into it, there’s more opportunity to optimize the spend that already exists,” he said.
OpenAP’s terms for buyers and sellers are similar to those of software companies that facilitate digital ad sales. Sellers pay a fee to OpenAP based on the amount of ad revenue that runs through the platform. There may also be a custom fee arrangement for buyers who choose to plug into OpenAP’s SSP, the company said. OpenAP and Omnicom declined to disclose the terms of their deal.
As in the digital ecosystem, the technology fees are the expected price for helping advertisers eliminate waste by sending more targeted ads, said Mr. Kramer.
“We feel we’ll see the same results within linear TV; it’s just going to take us some time to really test and learn and figure out the right way to approach this,” he said.
OpenAP’s SSP includes inventory from A+E Networks, AMC Networks, Fox, NBCU, Univision, ViacomCBS and the Weather Channel.
OpenAP plans to eventually add inventory from TV networks’ ad-supported digital platforms.
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