CEO Ashkenazi Makes The Case For Online Video Upfront

upfrontThe “Newfronts” online advertising sales period that to be kicked off by Digitas and its outside partners next month is going to have some added competition apart from the traditional TV upfront marketplace., the digital video sales platform, has formed its own Upfront Marketplace as it seeks to automate the entire process for securing future inventory across multiple screens.

As CEO Amir Ashkenazi notes in a conversation with AdExchanger, while video continues to be the fastest growing area of online advertising, “the buying and selling process remains a relic to the pre-digital world, with RFP buyer-execution and seller-review rooted in an offline, manual process.”

The company cited figures that suggest 20 percent of the average media plan cost is currently wasted on “administrative activities” around the planning and buying process. The company has been testing its “upfront market” with media buying agency Horizon Media and hopes to sign on others.

The idea of packaging inventory together, even as the advertising world becomes more “real-time” oriented may seem paradoxical. But despite the growth of online video, it still has a long way to go in terms of approaching the $70 billion TV market, not to mention the $9 billion committed during the last upfront season. Online ad spend is expected to grow 23 percent in 2012 to $39.5 billion in the U.S., while U.S. online video ad spending grew by 52.1 percent in 2011 to about $2 billion. By 2015, video ad spending will reach $7.1 billion, up from $2.16 billion in 2011, according to eMarketer.

How quickly online video can catch up to TV spending isn’t the big issue facing the digital ad industry however, though it does capture the difference in how advertising on TV and the web are valued. For media buyers, at least, the big issue is the perceived lack of premium online video and the difficulty in creating seamless cross-platform sales. Can and the others trying to create a more formal structure around digital buys address that? It’s hard to say before the process truly proves itself, but it does sound like a good place to start, at least.

AdExchanger: You’ve been working with Horizon Media on the Upfront Marketplace. Unlike traditional TV advertising, which is divided among dayparts like primetime and has programming still largely based on the fall season, why is does video, which has none of that, need an Upfront?

AA:’s Upfront Marketplace draws upon the industry-friendly term “upfront” to signify a proactive and automated approach to online video planning that caters to buyers.’s Upfront Marketplace supports this “programmatic movement” in our industry. Programmatic isn’t about assimilating to the upfront season or even to TV. It’s about ushering in a new process of buying and selling that removes the inefficiencies and pain points inherent to video advertising because it is so much more complex than TV.

AdExchanger: Digitas and several other companies have unveiled their Newfront, a two-week period that is happening when the traditional TV upfront is kicking off. Is’s Upfront Marketplace for video a part of that? Who is your Upfront Marketplace open to?

AA:  The Upfront Marketplace is not tied to the Newfront, or any media cycle or season. What the Upfront Markets does is bring the efficiencies of RTB buying and selling to the upfront or futures aspect of video advertising – in short, we are cutting out the many hours spent in spreadsheet purgatory. In the Upfront Marketplace, buyers input the parameters of their campaign and invite sellers to provide their “bid.” This process cuts down on all of the back and forth and also gives sellers insight into the key parameters needed to ensure they end up on the campaign. From here, the Upfront Marketplace moves to execution thus cutting down on the many hours involved in trafficking ads and the management of the campaign process.

AdExchanger: A lot of premium publishers complain that “RTB really means ‘race to the bottom,’” as they express fears that bidding commoditizes their inventory and naturally lowers their premium prices by competing with their direct sales. Are those fears unfounded, more or less, when it comes to video?

AA: Unfortunately, there are a lot of misperceptions regarding automated buying and selling, such as RTB. The reality is that in RTB environments, the seller has complete control and can not only segment their inventory based on value or price, but also can restrict the buyers who have access to this inventory. The notion that RTB or other forms of automated buying is a “race to the bottom” is quite unfounded. In fact, we have seen buyers of this type of inventory willing to pay a premium for the audience or content-type they prefer. The biggest challenge with RTB is that it does not have a “committed” component for either buyers or sellers who are looking for certainty, and that is what the Upfront Marketplace provides – an automated way of reserving inventory.

AdExchanger: Wifi-enabled TVs are quickly becoming the primary kind of set consumers are buying – whether they intend to take advantage of the apps or not. What are the challenges of advertising through connected TVs as a platform?

AA: Connected TV brings a lot more fragmentation, especially when you factor in the deeper penetration of video-on-demand, which tends to go along with that trend. But it also presents the same challenges and opportunities for advertisers that online does in general: how do I reach the audience I want? Viewers are spread across thousands screens, at different times. TV media buying will naturally take on some of the attributes of web advertising. It’s similar to the effect of e-commerce on brick and mortar businesses. Now, you can put your store online and be accessible to a new universe of buyers unconstrained by geography. That’s been happening to the computer and the phone for the last decade. And it’s coming to the TV.

AdExchanger: Is there a real-time bidding option that’s available for connected TV platforms, in terms of tying together a video campaign across devices?

AA: RTB is part of programmatic buying. It’s an interface between machines. That’s useful. But we’re really talking about allowing human beings to buy from other human beings in a much more automated, multi-faceted way. We’re creating for video what Amazon does for books. By quickly establishing your preferences and trade-offs, you can buy the campaign you want, the audience you want, and at the price you want –in minutes. While some companies are trying to take advantage of the inefficiency others, like, will create platforms and tools that solve it for brands, agencies, media companies and publishers.

AdExchanger: Do connected TV platforms have scale yet to make programmatic buying meaningful? Or are we still in the building stages?

AA: Connected TVs are small in terms of view. But most of our video content will be delivered from internet connections in the next few years and in that sense, yes, this is still about laying the groundwork.

There are two ways we are preparing: we have the Platform, which is focused on selling and serving the technology and the Marketplace, which is focused on bringing buyers and sellers together. Media buyers are starting to use those tools simultaneously and with great success. Agencies are also adapting by creating trading desks. DSPs are also seeing the potential of bringing those trading desks to bear on the connected TV buying process. We believe it will be data and the ability to access and apply it that will eventually bridge TV and online video completely.

AdExchanger: What has to happen to make connected TV advertising more robust?

AA: We’re waiting for a quantum leap in terms of interactive TV. Apple changed the way we approach mobile and video. The killer app for connected TVs hasn’t arrived yet. But the growth, even without that, is clear.

We view video as the ultimate brand advertiser; just like search is for direct response. That’s why video is growing so quickly. The web had jumping monkeys in banners for too many years. That’s done and will not be repeated in the TV space.

Apart from a killer app for connected TVs, to trade anything, you need to have standards. What we do within the frame will be different: more interactive, more social and more measurable. But at the end of the day, all the things we’re doing now will be built into the standards that emerge. What we build into video today is a sandbox.

By David Kaplan

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