As Mark McKee from Freewheel articulated so eloquently on Tuesday at the Future of TV Advertising conference, media owners of long form addressable video inventory (AVOD and SVOD) are standing at what he described as a “fork in the road”. We can either stand back and let this wonderful large screen, sound on, unskippable targeted ad format capable of delivering both brand and performance become completely commoditised or we can work together as an industry to keep it clean and effective.

In my view, having lived through what Mi3’s Paul McIntyre and panel moderator at Tuesday’s conference controversially termed as the “shit show” of display on the open web, both demand and supply ends of the market need to work together.

If the heavy lifting falls just on the shoulders of the media owners, and the demand side of the market – brands and their agencies – do not lean in, then we will see the inflow of intermediaries and “bad actors” as we have with display. And that will come at a cost to both sides of the fence. This isn’t just media owners touting their self interest.

Surely both clients and agencies would prefer we move towards what Chris Vanderhook the COO of Viant Technology has termed “the outcomes era”? Writing on LinkedIn, he described what many of us are feeling to be true:

“The internet has always been dominated by 2–3 giants. It used to be AOL and Yahoo. Now it’s Google, Meta, and Amazon. But what’s actually dying is the version of the web built on traffic arbitrage, display ad bloat, MFA, branded search and last-touch attribution — all hallmarks of the Web 2.0 era.

"Many companies in the Web 2.0 era are over-indexed to display and face risk. Google has similar exposure — and AI now threatens its search money machine. Even Double Verify (DV) has massive display reliance. This exposure exists because of last-touch attribution gamification — and they’re all in on the game. But marketers are finally calling BS.

"This is the end of an era — and the beginning of a new one.”

Move faster

If we want this to be a reality in Australia we will have to move fast.

As McKee pointed out, 62 per cent of Australian CTV inventory is already being traded programmatically. What he didn’t break out was the per cent spent on premium programmatic – programmatic guaranteed (PG), private marketplace (PMP) or Unreserved Fixed Rate (UFR) – and the amount being spent on the open exchange.

If it is north of 50 per cent on the open exchange then that’s an alarming figure and a wake up call for the industry.

For once, the media owners on that panel (Nine, Seven and News) were united: We all agree that any technology that brings more transparency to the market and brings the buy and sell side closer together is good for the broader media ecosystem.

Losing 36c in every dollar to dubious “tech” intermediaries on the open exchange is good for no one – not media owners and not brands and their agencies. If we veer towards a guaranteed world,  both brand and their agencies gain from one-to-one relationships with media owners, e.g. PMP/PG trading that enables more efficient packaged buys and more of the client’s ad dollars contributing towards media spend.

But we need to set the record straight. Intermediaries have become so rich and powerful from Web 2.0 that they will use any reason to encourage and ultimately force clients into an open exchange environment. They will cite “scale” and “ease of purchase” but in fact it is the opacity and murkiness of the open exchange that has allowed for the intermediaries, many of them “bad actors” to survive and thrive.

Walled garden

Let me be controversial and say this: Media owners would not shy away from investing in a platform that provides scale and ease of buying if they were assured that buyers would lean in and support it.

But the buy-side would also need to acknowledge, as OzTAM CEO Karen Halligan pointed out in her Future of TV Advertising presentation “not all views are equal”.

As we discussed on the subsequent panel, there is a clear divide now between the different kinds of video and you can clearly plot them on a spectrum from user-generated content (UGC) to ultra premium.

Moving into an outcomes era, rather than simply replicating channels that reward last-click attribution, would mean recognising that screen size, device, context and audience will contribute to outcomes.

As a group we need to align on our measurement strategies as well as metrics. Does replicating KPIs like “reach” and “frequency” out of linear TV really work in addressable TV? How do we measure and gauge engagement, if that’s what’s really driving the outcomes?

I’d shout out to industry executive and Signal editor, Ben Shepherd, who, like Vanderhook, calls out the damage caused by the gamification of last-click attribution.

We can avoid this with SVOD and AVOD but only if we agree on what drives outcomes now. If it’s engagement, what does that really look like on addressable TV? Click through rate (CTR) on a connected TV is a fantasy that needs to be dispelled as quickly as possible.

Also, how do you compare reach and frequency in a 30 minute piece of long form compared to a 1 second view on a 6 second short video? Is there one measure of success or do we need to think about how these might act differently on the video continuum?

It looks like OzTam is grappling with this, as are Adgile. Unlike other markets, we’ve had BVOD since it launched in August 2018. We are a mature market – we need to start acting like one.