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.

The auction drew 90 new advertisers and sales were up 51%, which means Sling got higher prices than it would have by selling direct.

“One thing about programmatic that’s interesting is you can see how you’re doing pretty much immediately,” Lowy said. “You can look at your screen and know what’s resonating and who is winning the bids. You have a good understanding of what’s going on really fast.”

Sling followed that up with an auction of NBA Playoffs inventory. “It did great,” Lowy said, although not quite as well as the NCAA auction.

After that, Sling decided to create programmatic auctions for some of its addressable inventory. Sling looked at first-party data about its audience — on an anonymous basis, through third-party provider Acxiom — and found consumers who intended to buy a car in the near future and consumers who were in the market for a vacation. Those impressions were made available through an auction.

“We set that up right before Memorial Day,” Lowy said. “We told our DSPs and agencies that if you want to find true auto intenders or you want to find true vacationers, based on how Acxiom categorizes that, you can go ahead and bid on that audience.”

In that auction, advertisers weren’t buying ads in particular shows. They were buying impressions by specifically targeted viewers. “You’re buying impression by impression, bid by bid. You’re at the whim of when that household is watching.”

The auction drove up the value of those impressions and sales rose 83%, according to Dish.

The impressions that aren’t sold at auction don’t go to waste. “The way operations works is that other impressions fall down a funnel to the next options, which could be geo-targeted ads, general-market ads or direct-response ads,” Lowy said.

One of the first demand-side platforms to participate in Sling’s auctions was Adobe.

Auctions can increase how relevant ads are for consumers, making them more valuable and justifying the higher prices advertisers pay in auctions, Phil Cowlishaw, head of solutions consulting at Adobe Advertising Cloud, said.

The private nature of the auctions was important because it gives both buyers and sellers more control, he said. “Sling has an expectation and understands who is going to be coming into the systems, and the brand has control knowing that they’re going to be buying on Sling TV and that there’s that relationship [with Adobe] and therefore they can get super analytics and insights back from the Adobe Advertising Cloud to understand how their campaign is performing.”

Cowlishaw said spending through the Adobe Cloud on Sling auctions increased 90% from the first quarter to the second quarter.

Auction enthusiasts expect that more TV advertising will be made available for bidding.

“What’s nice about this is that it’s kind of the opposite of what happened in the banner world, where instead of driving price down, it drives them up,” Tremor’s Berlingo said. “Broadcasters are trying different things now and experimenting, but the connections are all there and it’s really just a matter of how do you get the right value for your supply in the marketplace.”

Cowlishaw expects auctions to grow, especially as the OTT space expands. “It’s the way people are starting to consume programming, especially live sports and that’s a big focus of our partnership with Sling,” he said. “Today, it’s going to be more focused on the fact that this is over-the-top, so that the auction can be created. I believe we will start to see it in linear television, but that’s going to take time. We’re already working with a number of partners in terms of what this future would look like.”

Lowy said advertisers are getting more comfortable with auctions. “Not only are they getting comfortable, but we’ve made it very easy for them to continue to come back,” he said. “It’s television, but we wanted to make it the way you buy digital.”

Prediction: TV Auctions Will Grow

Dish is also expanding its sales force as its programmatic business grows. In addition to account executives and support people, it is hiring d data scientists who can do measurement and reporting. Operating people are needed to work with supply-side providers.

Sales staffers need to understand new dynamics: how DSPs relate to agencies and clients, one-to-one impressions and how auctions work.

“It’s actually more important now to have the right account executives who understand the digital underpinnings and digital business than to just have a machine do it,” Lowy said.