Three of the biggest TV companies are joining forces to accelerate the shift towards data-driven ad sales.
Viacom, Time Warner's Turner and 21st Century Fox's Fox Networks Group have formed a consortium that will standardize the reporting of the size of the audience advertisers get when they buy targeted ad packages designed to reach specific consumer groups—for example, people who plan to buy an SUV in the next six months.
Viacom, Turner and Fox say they have been working on their advanced audience platform, OpenAP, for about a year. It will be up and running in time for this year's upfront market and other TV companies are invited to join.
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The group on Wednesday is releasing an open letter to the industry about the initiative and will hold an event to provide additional details on April 7 in New York.
TV companies have been building up their data capabilities to compete with digital advertising, which has been grabbing ad dollars while traditional TV ratings have been declining. The data is being used to improve the targeting of TV advertising, traditionally aimed at mass audiences, and better account for how effective TV ad campaign are at creating sales.
But because each TV company's data-driven ad products are different, they have been complicated for advertisers and media buyers to evaluate.
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"The idea of this is very powerful and positive that we're going to have some industry standards and we're going to have some third-party measurement, which his very important to us," said Dave Penski, CEO of Publicis Media Exchange. "This is something we're overwhelmingly supportive of. It's a step in the right direction."
NBCUniversal, which says it is committing $1 billion worth of its ad inventory to data-driven advertising, decided not to participate in the development of OpenAP because of questions about the technology, according to a source familiar with the situation. Other companies including CBS, The Walt Disney Co., A+E Networks and Discovery Communications have also rolled out data-driven capabilities.
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Buyers said they wanted to see those other media companies join the group but noted that the OpenAP couldn't yet be used as a currency for transacting deals. Some also expressed shock that three big media companies were able to work together for a year without word leaking out.
"The three of our firms have really we feel been at the forefront of the evolution of TV as we've been creating data-driven solutions and helping our partners move beyond the simple, basic demography and into the advanced audience targeting," said Sean Moran, head of marketing and partner solutions at Viacom.
Moran said the small core group of three companies worked together well and were able to move quickly. The project has the support of the top execs at all three media companies.
Turner has been rolling out data-based ad products for a couple of years. "I believe that some clients have been hesitating because it's been a little complicated," said Donna Speciale, president of Turner Ad Sales. "Now with this happening and simplifying it, which is what they've been waiting for, you're going to see a lot more targeted audience buying for clients now in the television space."
"What this marks is the first time you're seeing the ability to buy on an advanced audience across TV quality publishers at linear scale," added Joe Marchese, president of advanced ad products at Fox Networks Group.
Marchese noted that TV advertising, with its full-screen, 30-second ads, doesn't have the problems digital ads have with viewability and fraudulent audiences.
"So to take the best of what makes TV work and why it's the most effective, and combine that with what makes buying in digital so attractive—the ability to buy on unique audience segments, not everybody buying the same audience segments—that's the win," Marchese said. "And the next phase of this will be applying it to our dynamic ad inventory as more and more of our linear feeds are delivered over IP."
The three executives spoke during an unusual joint conference call.
The three companies will continue to offer the proprietary advanced advertising products they've developed and have been offering to advertisers. "Everything we've been doing to date is going to stay in place. What this is not is a transactional tool. There's going to be standardized audience definitions," said Speciale.
"It will be able to have a third party verify on an apples to apples basis how many people were delivered based on the data sets that they chose," said Marchese. "So it basically standardizes the front end and the back end of the system so they only have to do each of those once, just like they do when they're buying any other demo today, the more simple demos."
An independent auditor will be part of OpenAP. The identity of that auditor is expected to be announced at an April 7 event.
"The goal is that the whole industry will work this way, and that is what our intent is," Speciale said. "This is just the beginning. It's going to grow, it's going to mature. We're going to have client and agency input as we start building it and making it bigger. Right now it's linear. We're going to want to make it cross platform on all our premium content, on all the screens that our consumers and fans view it on. But right now we needed a starting point."
OpenAP is being run on a non-profit basis by its three members, the three media companies. Other companies will be able to join the consortium, which will not be charging ad agencies or advertisers for its services.
While OpenAP will focus on more targeted audiences using multiple data sets, rather than the broad demographic data Nielsen delivers and is currently used as currency for buying and selling ad time, buyers say Nielsen data will continue to be important to the industry.
Nielsen also said it supported the OpenAP effort.
"We strongly support the consortium's efforts to create a clearinghouse to audit the audience-based advertising delivery of its members. Nielsen's gold standard data measures many, if not most, of these audience-based advertising guarantees," Nielsen said in a statement. "We support the consortium's goals to give advertisers and agencies verified and audited reporting of delivery. This is an important part of what is needed to create openness and transparency in ad buying and selling. We look forward to cooperating and working with the consortium."
Here is the open letter about OpenAP:
"The evolution of television has brought new advances in audience targeting across premium publishers, which is enabling advertisers and agencies to drive more efficiency and more effectiveness with their TV budgets.
While demand for audience targeting has grown significantly, adoption has been limited by the fact that audience buying is not as transparent, as consistent and as easy as traditional guarantees. It doesn't need to be that complicated. That changes today.Today, we are proud to introduce OpenAP, television's first-ever open audience platform. Founded by a consortium of television publishers and operated by a leading independent auditor, OpenAP will deliver cross-publisher targeting and independent measurement for advanced audiences.
This means consistently defined audience targets can be activated across any OpenAP member publisher. It means truly independent measurement and reporting by design, not just reactive third party verification. It means an open platform that supports industry-standard measurement sources and data, not just proprietary, walled-garden, self-governed reporting. It is consistent matching for an advertiser's custom first-party audiences in the development of cross-publisher media plans.OpenAP will be a single platform that agencies and advertisers can integrate with their own planning systems to activate advanced audience targeting and independent measurement within premium content. That premium content reaches 93% of all television audiences today, and we hope it will expand if additional publishers join OpenAP in the future. This consortium is a necessity to move our industry forward.
On Friday, April 7, the three of us will gather and share more information about OpenAP with agency, client and media influentials across our industry. We have never been more excited about the future of television and look forward to sharing more with all of you."
Joe Marchese, Fox Networks Group
Donna Speciale, Turner
Sean Moran, Viacom