When advertisers think of the social networking category, they mostly focus on the “social” aspect, as in a way to reach scaled audiences within walled gardens.
But there’s also the “network” opportunity, as in the API-based tools that make it easy to advertise on social platforms.
That’s what Comcast is going for with its recently launched Universal Ads, which is a self-serve ad-buying platform that aims to make it easier for small and midsize businesses to buy premium video.
Sounds like a demand-side platform – but it’s not, according to James Borow, VP of product and engineering for the new business line.
“It’s an ads API, or an ads manager,” Borow said.
That might sound like jargon, but those are meaningful terms for first-party API players such as Shopify, YouTube, TikTok, Meta and Snap.
“The advertisers we’re talking about don’t even know what The Trade Desk is,” Borow told AdExchanger.
Not just SMBs
When Universal Ads launched in January, it was framed mainly as a TV and video-buying access point for the millions of smaller advertisers on Meta, YouTube and TikTok. Comcast’s NBCUniversal business only has some thousands of advertisers.
But Universal Ads is less about attracting the mass of businesses and local services that make up the majority of Google and Meta accounts. Rather, it’s going for the digitally native brands that already spend millions or even tens of millions of dollars per year on marketing and have serious cash flow but don’t necessarily have a lot of brand recognition.
These types of brands – for example, an ecommerce business built on Shopify – are often lumped into the SMB category along with small dental practices and mom-and-pop shops, Borow said.
But many have now grown into major marketers, with the only difference between them and more established brands being that their budgets have been “confined to the social networks,” he added, and have not spread to TV or other channels.
In Borow’s words, Universal Ads is “a platform for economically rational advertisers to buy TV ads.”
“If you’re a brand that’s scaling Instagram, TikTok and Reddit, we want you to be thinking, ‘Okay, the next channel is going to be TV and premium video,’” he said.
But these data-driven social advertisers need a way to buy TV ads with a UI that looks and feels like a social platform’s buying UI, which is what they’re used to.
The biz dev path
Universal Ads is also appealing to social advertisers through strategic partnerships with providers they already have experience with, such as the one it signed last week with Measured, an incrementality measurement service.
Borow said the partnership will make it easier to test TV supply from Universal Ads within the same platform that brands use for social advertising.
Meanwhile, in March, Universal Ads announced a partnership with Ramp, which sells corporate credit cards and business management tools and works with a lot of startup businesses. In other words, the type of digital-native companies that are likely also social media advertisers. The integration with Ramp includes a $500 credit as an incentive to begin testing TV using Universal Ads.
But convincing savvy social marketers to get on board with TV isn’t that hard of a sell. It’s not a secret that linear TV campaigns create lift for online performance marketing channels, said Borow, who spent most of his career at social networks before joining Comcast, including as global director of Snap’s self-service ad platform and as an advisor to Reddit and Discord on their self-service ad platform launches.
“We all knew how performant TV really was,” he said. “I think we at the social nets actually knew it better in some ways than TV did.”
Margin calls
Beyond the performance pitch, there’s one more way Universal Ads is courting social buyers.
Although broadcasters and video publishers that work with FreeWheel pay a fee to include their inventory in a package, Universal Ads charges zero demand-side fees. That’s very unlike programmatic companies, which live and die by their margins of online ad spend.
The Trade Desk’s margin, for example, has hovered around 20% for as long as it’s been a public company. SSPs Magnite and PubMatic, both public companies, don’t report their take rate at all, though in a note last year the investment bank Wells Fargo estimated that Magnite’s share of Netflix ad spend is around 3%.
Still, Netflix has the power as a media partner to force vendor partners to accept rock bottom. Likewise, TTD’s margin from campaigns through Walmart’s DSP is unknown, but also likely far lower than its overall take rate.
Still, in programmatic media, those margins are everything, whereas a selling point of Universal Ads is that it doesn’t care about fees or margins at all.
“I mean this in a very good way,” Borow said, “but [Universal Ads] only makes sense because it’s part of Comcast.”
It’s a walled garden world now. Which doesn’t leave much room for actual third-party vendors.
