Inside the ad tech firm Disney will get in its Fox acquisition
Along with FX's gritty dramas and Marvel characters like Deadpool and X-Men, Walt Disney will also obtain a much lower-profile, but potentially critical business unit, that could help the Mouse House revamp TV advertising, when its acquisition of Fox closes.
When Fox bought the ad-tech startup TrueX for $200 million in February 2015, ad-skipping had become the norm and commercial-free competitors like Netflix were rapidly gaining market share. TrueX, which was co-founded by Fox's current and soon-to-be-ex ad sales chief Joe Marchese, positioned itself as an answer to the commercial clutter that has plagued the TV industry and has made digital competitors more attractive to both consumers and advertisers.
While its ad formats – like engagement ads that prompt viewers to watch a commercial in exchange for an ad-free experience -- weren't revolutionary in themselves, TrueX brought to Fox a group of people and a culture that helped initiate efforts to fix TV advertising. Now many of those people are headed to Disney (though Marchese himself is leaving Fox).
For the media behemoth, the injection of ad tech is important, as Disney has generally lagged its competition when it comes to experimenting with new ad models, according to media buyers.
But exactly how TrueX will be absorbed into Disney is anybody's guess at this point. (A Disney spokeswoman declined to comment for the story.)
Under Fox's ownership, TrueX has been able to operate largely independently, allowing it to work with other major broadcasters and cable programmers, including Viacom, Turner and CBS. And as the marketplace increasingly seeks ad solutions that are scalable across networks and screens, TrueX's independence is a selling point.
Turner, for example, struck a deal with TrueX last year to revamp the ad experience in its re-launched TBS, TNT and TruTV apps beyond pre-roll ads. It has been incorporating TrueX's interactive and engagement ads in the apps, which Jesse Redniss, exec VP of data and product innovation at Turner, says has resulted in a measurable increase in consumer attention and engagement.
"The industry needs more companies that can work across publishers to experiment," he says.
For Sleep Number, which ran campaigns with TrueX throughout 2018, the company's premium audience set it apart, says Kevin Brown, chief marketing officer. He notes that with TrueX there's a guarantee the commercial will be seen uninterrupted and will be completely viewable. Sleep Number will continue to work with TrueX in 2019, Brown says, but adds that while the campaigns served through the company resulted in good engagement and consumers taking qualified actions, it wasn't the most efficient when it came to price.
"We hope they can retain the autonomy and speed at which we are used to working with them," Brown says.
Life under the Mouse
Under Disney's management, however, there's the very real chance that TrueX won't remain an independent entity.
One possibility is the company will be split up, with TrueX's technology division, led by Josh Rangsikitpho, moved under Aaron LaBerge, chief technology officer at Disney's direct-to-consumer and international segment; while Pooja Midha, president at TrueX, who handles the sales and marketing functions, and her team, could report into Rita Ferro, the head of ad sales for Disney.
If Disney were to structure TrueX as more of an internal solution that it leverages exclusively across the Disney portfolio, it would be a challenge to scale ad formats or measurement solutions, says Adam Gerber, president of global media at GroupM's Essence. The specialist agency struck a year-long deal with TrueX in June to develop and test new approaches for connected TV advertising.
"Buyers want cross-marketplace solutions that allow us to implement in a consistent way," Gerber says. "The more walled gardens that go up, the more separation that's created, the more challenging it is for us to innovate. For us to innovate at scale we'd need to do a bunch of one-off [tests]. That's not efficient. We want solutions that are architected in an open way and that can be implemented across the industry."
Walt Disney has been slower than rivals in testing new ad products and implementing ways marketers can more granularly target audiences. NBC Universal, Fox and Turner, for example, have been more aggressive in their attempts at reducing commercial loads and experimenting with other formats (like the six-second ad), and as such, have invested mightily in the technology and infrastructure it requires.
While Disney has BamTech, which it acquired in 2017, it handles more of the back-end operations. Disney doesn't have a consumer-facing ad product, which is where TrueX is expected to fill the void.
And as Disney builds out its direct-to-consumer offerings, TrueX could play a key role in determining how ads are delivered in these types of environments.
Midha, who joined TrueX in February 2018 after spending five years at Disney-ABC TV Group where she served as senior VP of digital sales and operations, declined to comment on how TrueX would fit into Disney pending the close of the deal, but says regardless of the acquisition the focus is to continue innovating the ad experience across publishers, delivering a better user experience and creating more value for both marketers and publishers.
'An aggregated supply offering'
TrueX has been focusing much of its attention recently on the burgeoning connected TV space.
"It's a huge miss to have a digitally-delivered video environment and then only serve the exact same ad format as when TV was delivered via rabbit ears," Midha says.
TrueX recently worked with Sonic to experiment with utilizing gestures to interact with its campaign and implemented voice activation for an Amazon Echo campaign.
And as part of its deal with Essence, TrueX will work with an undisclosed marketer to test another new ad format within the next two months, Gerber says, with a goal of testing a new format every quarter moving forward.
Of course, much of this still remains in the testing phase and it remains to be seen if TrueX can get to a point where it can truly standardize any one of these in a meaningful way.
There are other companies like Brightcove and Innovid that are also working to innovate advertising on connected devices, but Turner's Redness says TrueX has not only built a supporting ad tech component, but is tuned-in to the consumer experience as a whole.
"What was attractive to us about TrueX was the group of publishers they were working across and the number of operating platforms they have the ability to implement across," Essence's Gerber says. "There are other companies in the space of operationalizing connected TV and OTT ad formats like Innovid and Brightline. What those guys don't have is an aggregated supply offering I can go in and execute across in a simplified, consistent and one-stop shopping way. To me that is what the value of TrueX could be in the marketplace as we explore new models for transacting."