Scott Ferber is CEO of TidalTV, a video advertising, optimization, and yield management solutions provider.
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SF: Yes. At Advertising.com, we were predominantly focused on measurable direct response outcome. And a direct response outcome was one we defined where the sale could occur in some trackable, measurable way. That's the basis for affiliate marketing. Those are types of activities we were involved in.
However, it appeared to us, holistically, that the vast majority of goods, products were sold not in that convenient manner so we thought sight, sound, and motion - or video - was the most powerful branding medium, and that when a consumer was given a choice or was faced with a purchase decision at the bottom of the marketing funnel, it mattered what had happened at the top of the marketing funnel.
The theory was, how can we bring more accountability to television creative where typically what it's affecting are events that happen after the fact and that aren't necessarily trackable in a closed environment like the ones on the Internet? So the whole vision became, can we build, a platform or system in the to analyze, decide, and deliver video‑based advertisements in a way that take into account all the downstream measurable repercussions in some sort of optimal way?
We defined optimal as optimal for the advertiser, optimal for the consumer, and optimal for the media owner, and in TV I would argue you have a distributor, too. It's not just Warner Brothers. It's also Time Warner Cable, Comcast, Dish and others.We are trying to provide value throughout the ecosystem. I'm trying to be a little bit simplistic, but that was the vision.
We are solving an eco-system issue which means it has provides multiple consituents benefit from what we are providing… Advertisers: Lower cost to reach their target audience, and as a results increase efficiencies and better performance. Agencies: deeper insights, analytics and overall accountability and simplicity. we provide them with the tools to be more effectively execute against the media strategies. Publishers: the extraction of more value from the same inventory via know audience addressability. Ultimatley it is about getting the right ad to show across multiple devices and multiple ad formats to drive efficiencies in the ecosystem.
Yes, it's not even a choice. It's a fact. We have to I think, “What is a device - a TV, a computer, an iPad, a tablet, a mobile phone, is it a stream? They are all ways that I receive content that I enjoy. The advertising media ecosystem, platform, or systems need to be multi‑device, multi‑format. So for us to be successful at creating efficiencies, we have to be multi‑device and multi‑format.
What do we do today? Predominantly online video, a good chunk of mobile video, and we have all the systems and infrastructure in place for what we would call addressable television or advanced TV. It's just that the volume is on "the come," so to speak. The long‑term on what we're solving and the short‑term of what we are doing today.
TV is where the scale and dollars are so, of course, that’s a big focus of ours. That said, we've got branding work to do. I don't think it's the right name for us long‑term. It seems that the word TV is a great term for the generation of folks currently, right now. I'm not sure that's the right term long‑term, if that makes sense.
I think it's evolved significantly and exchanges now bring this massive solution for –and for lack of a better term - low quality inventory. I think an efficient market mechanism for dealing with that are the exchanges. I think that it has arisen as an area of a great supply. It's interesting to see that the networks are still abundant.
I remember people foretelling the death of the network, but they're still out there. It's a little bit like, is e‑commerce going to kill bricks and mortar? And the answer is, it'll impact it, and in some cases, it enhances it, and in other cases, it kills it. And I think that's the case here, too, with what's happened in display.
Also, I think there's been some natural shifts among how people decide to allocate their media. What we see among the biggest folks, the largest media companies are looking to more take their stuff in house. That includes both exchanges and networks. I think ad agencies like exchanges because it gives them a pricing diversity and takes a lot of the pressure off. And for the same reasons that agencies like it, media owners don't. So, I think that's the natural tension that'll happen in the display space. Interestingly enough, if you look at television, TV has a hundred times the inventory of online video. But TV is inventory constrained. And the reason I say that is because for a medium that's fragmented and losing shares supposedly, year over year, it's amazing how it sustains incredible, consistent double digit price increases year over year in these raw CPM charges, right?
I think that the usage of information, the most important thing is that it needs to be done with the NAI, IAB, and other industry standards and if our industry can take the highest road possible with the use of data, I think that the display business will continue to prosper.
I'd say we have a network. We have an online video network, and that allows us to demonstrate what we can do with the platform. And we have the ability to provide that platform technology to others. And we compete with the standard online video networks and platform providers out there. We're not an ad server but we can provide that solution and have built a superior product, but we don't compete with them... We actually partner up with a lot of the publisher side solutions. We're trying to be what we call "supply side agnostics," where, we want to be able to work with everybody. We think that's really important.
So I mean, if someone said to me, "Who's going to call you out as a competitor?" I'd say it's the online video ad networks, predominantly.
Today we sell by whatever our client asks us for. Typically, most media is evaluated as CPM, or cost per, in the case of television, cost per target rating point basis. We do, in the case of digital buyers, cost per completion, or cost per engagement metrics.
What's the most popular right now?
I'd say CPM, still. And it's basically because we're dealing with agencies. And I just think that's the standard metric that normalizes all media, in some way, shape, or form. And then, in the future, I think it will evolve continuously, and this is what we did in advertising.com. We really were a pure CPA shop, and they all pay us on CPA. I think there's a different A here. The A is not that I buy a book, because I'm not going to by a book from online video ad.
Yes, it may happen occasionally. But display is a direct response oriented, saying you're already down at the bottom of the funnel. It's at that moment when you say, "Hey, I'm ready to stop what I'm doing and do it." Branding is more to influence a decision later in the television aspect, because you're in the lean back environment.
So I think the mediums are very different, and I think that the action that will be paid against will be those metrics we discussed earlier. Unaided and aided recall, perhaps sales, even, if we can make that high in that particular industry. In the case of consumer packaged good companies or manufacturers, it's very possible that we will be paid based on our impact on showing sales flow, and show checkout counter data. And that's where we would like to drive it.
Strangely enough, we built our capabilities for it first. So, actually, in a weird way, it's the greatest application of our technology, the addressable television. It's the least volume part of our business. How's that for an ironic statement?
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