Brought to you by: The Trade Desk
AOL says it has begun selling television ads through its programmatic video exchange, Adap.tv as it looks to take a bite out of the $68.5 billion dollar television advertising pie. But there's only one issue: the company won't say which networks they're working with.
Problems sourcing inventory have plagued other digital ad-tech companies,such as Google, which tried,to get into the TV game late last decade. So AOL's vague description of its partners -- it says Adap.tv buyers can reach nearly 100 cable networks but won't say which ones -- raises questions about the initiative.
"We are not publicly providing TV content partner names right now due to ongoing negotiations with these companies," wrote a company spokesman in an email. "We'll have more to share in the near future on that, but for now TV inventory with a potential reach of 90 million,households across almost 100 cable networks is an accurate representation."
For now, the ad inventory can only be reserved through the system, meaning the actual creative must be sent to programming companies to be inserted into the broadcast. The process is then less automated than what a programmatic digital buy might look like, but AOL says it still brings advantages for buyers looking to enhance their media plans by adding data to it.
"We're on this mission of helping brand advertisers and agencies automate a lot of the mundane processes they have within the media buying processes," said Bob Lord, CEO of AOL Networks. "The area of buying TV and video, you just know it's ripe for automation and reinvention."
The TV side of the exchange opened for business in January, with Magna Global, the investment arm of IPG Mediabrands, the first to buy linear television through the platform.
Nevertheless, Magna says they plan to do more of this kind of media buying. "This is the start of a vision for where we think the marketplace needs to go," said Todd Gordon EVP Investment at Magna Global, which is one of the agencies driving the change. By 2016, Magna Global hopes to put 50% of its spend through automated channels.
"This opens up a pretty big revenue stream potential for us over time," said Mr. Lord, putting emphasis on the future.
Mr. Lord said the ability to layer data onto TV buys will be a main selling point, bringing efficiency to the television buying process. Magna Global, for instance, connected its AMP data platform to Adap.tv, which Mr. Gordon said is helping the company buy television spots more effectively. "We can much more seamlessly find our customers through their platform than we can in some other areas," he said.
Programmatic has been one of AOL's strengths of late, a bright spot for a company long in transition. In AOL's most recent earnings filing, it said its "third party network" revenue, almost all programmatic, grew 63% from the past year to $223.6 million.
Television, Mr. Lord said, was in his sights since joining AOL in the summer of 2013: "We knew that we were going to go after this business and it's one of the reasons Adap.tv came into the picture really quickly."