Dish Dives Into Auctions to Sell OTT Sling Spots

Sales rise for addressable ads in digital environment

Why This Matters

Auctions make traditional TV nervous but could help networks get better pricing for advanced advertising.

Related: Local TV Seeks Ways to Play to Its Strengths

Staking a claim to new advertising territory, Dish Network and its Sling TV over-the-top service are embracing programmatic auctions as a way to sell its inventory of spots.

Sling is running several different types of auctions and has used the technique as more than a way to sell remnant inventory it couldn’t unload otherwise. It sold spots during both the NCAA men’s basketball tournament and the NBA Playoffs — some of its best-quality and most in-demand inventory — to the highest electronic bidders and scored big returns.

Now, taking advantage of the digital delivery system Sling uses, it is also employing auctions to sell some addressable impressions to advertisers.

“This is live, linear and on-demand television,” Adam Lowy, director of advanced TV and digital sales at Dish, said while outlining Dish’s auction program at the B&C and Multichannel News-sponsored Programmatic Summit. “That’s never been done before in live television.”

Inventory Control a Concern

As the TV industry slowly moves to accept programmatic buying and selling of commercials, a line has been drawn at real-time-bidding auctions. Networks have been concerned that in auctions, they’ll lose control of their inventory, spots will become a commodity and prices will ultimately fall.

Because Sling TV is over the top, it has a digital architecture, which means spots can be dynamically inserted into programming in real time, something that can’t always be done with TV that is broadcast or delivered through set-top boxes. That lends itself to being sold in the same manner as digital advertising.

“The digital underpinnings allow us to really do more targeting functions and bring programmatic into play and real-time bidding, because of how this television is being delivered,” Lowy said in an interview. In addition to Sling, some on-demand ads delivered to Dish Network viewers on digital devices can also be included in some of the auctions.

Craig Berlingo, VP of product at Tremor Media, a supply-side platform that hosts some auctions for Dish, said auctions are making inroads at other OTT and TV Everywhere players, too.

“I think Dish is doing something pretty unique” by bringing high-quality TV inventory into the programmatic world, Berlingo added.

“Dish has experimented with and has found some success in allowing the auction dynamic to happen on some of its premium stuff,” Berlingo said. “I think they’re definitely pushing and exploring a lot more than other publishers. There is TV-like inventory that you could watch on your iPad [being sold at auction] but it’s not TV.”

Related: Following the Road Map to Programmatic TV’s Future

Sling’s earliest programmatic auctions have enabled buyers to bid on ads on networks grouped contextually — sports networks, general entertainment networks, kids networks.

In those auctions, Dish sets a price and guarantees a certain amount of impressions.

Sling protects itself by keeping its auctions closed. Bidders need to ask for an invitation to take part, which keeps inappropriate advertisers away from the programming.

Sling can also set a floor price for ads and impose other conditions, including limits on frequency, Lowy said.

“It’s very controlled, which is very important for us. In terms of our content, we want to make sure we’re putting the right stuff in there,” Lowy said, adding that private auctions are also “best for our clients and for our programmers.”

Bidders who are approved get a Deal ID — a unique identifier that enables access to bid for the available inventory. Highest bidder wins, but Dish and Tremor employ a second-price auction, which means that the high bidder pays one cent more than the second highest price.

That’s designed to encourage buyers to enter auctions by ensuring that they won’t pay an above-market rate for commercials, Berlingo said.

Encouraged by early successes, Sling held an auction for its inventory during March Madness, the NCAA men’s basketball tournament.

“We spoke to all our DSP [demand-side platform] providers — and there’s roughly 11 or 12 of them that we work with — and we told them what we were doing, and literally within a day or two we had it set up and it was running,” Lowy said.

Buyers were excited because they thought March Madness inventory was sold out, he said. “It was a real surprise to say, ‘We’ve got it and it will go in real time. Go ahead and start bidding on it.’ ”