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Ad tech companies are being reincarnated as streaming services.
Canela Media, for example, launched in 2019 as a digital ad platform to help advertisers target multilingual Hispanic audiences in the US.
But in 2020, Canela Media launched Canela.TV, a free ad-supported streaming service. This was the company’s logical next step and a move it made based on advertiser demand, said CEO Isabel Rafferty Zavala.
Before founding Canela Media, Rafferty Zavala was a VP until 2016 at Adsmovil, another Latino-owned ad server that started off as a mobile ad platform before launching its own streaming service earlier this year.
But over-the-top (OTT) technology is a “very different animal” from digital, Rafferty Zavala said, noting that streaming is more akin to television than the web.
Many of the dominant streaming platforms are entertainment companies first and try to “figure out” the ad tech later, Rafferty Zavala said, often assuming that simply hiring a digital sales team will do the trick.
Programmers need to understand that there’s no easy button for monetizing their inventory, especially if they want to attract ad dollars from advertisers looking for specific multicultural audiences.
Rafferty Zavala spoke with AdExchanger.
AdExchanger: Does Canela Media keep its streaming offering separate from its ad tech business?
ISABEL RAFFERTY ZAVALA: They’re pretty intertwined. We’re ultimately an ad tech company, but we want to use digital media to connect with Hispanic audiences.
Our platform combines a programmatic network of ad-supported sites with our streaming service. We represent around 180 media publishers, which gives us a lot of scale, and about 50 million unique [devices] in the US.
The goal is to provide advertisers with an end solution to target multicultural, bilingual Hispanic audiences.
How does Canela target bilingual audiences differently from purely Spanish- or English-language audiences?
It depends on the medium. What we do in streaming is different from what we do in display.
Our streaming strategy is mostly based on behavior.
Some people watch certain types of content in Spanish and others in English. For example, a lot of bilingual users choose to watch soccer in Spanish because it’s a passion point. But they’re more likely to watch more mainstream Hollywood movies in English. We recommend users’ content based on that preference history.
Do you use any other data to inform your targeting?
Users register when they download our app, so we also layer first-party data into those recommendations, including country of origin and language preferences.
This translates into how we serve ads, too, which is in the same language as the content. For bilingual viewers, watching in English or Spanish is a conscious decision, so an ad in a different language is actually disruptive. That’s why ad campaigns in the same language as the encompassing content do much better in terms of conversion rates.
That’s our streaming strategy. For digital and mobile, we’re very location-data-heavy. We analyze specific patterns that guide our ad strategy. For example, some first-generation Latinos have strong travel patterns between the US and Latin America or they frequently visit certain venues to see live music, like ranchera, which tells us how to message to them.
How else does Canela’s programmatic strategy differ between streaming and digital?
There are some limitations going into connected TV from data-heavy user targeting in mobile, which is my background.
But OTT is much closer to a television experience than a digital experience. There are layers of complexity that don’t exist in mobile or web video.
Scale and data limitations are an OTT reality, and CPMs are higher. There aren’t billions of impressions to layer into advanced audience data segments, like on the open web. And as for the data that does exist within OTT environments, it’s difficult to aggregate because not all the inventory is within a proprietary tech stack. Some of it belongs to, say, Roku or Samsung.
In general, I don’t see OTT targeting getting as programmatic as digital is, at least not in premium environments.
How exactly does Canela sell its streaming inventory?
We’re mostly selling direct. Only about 6% of our streaming business is programmatic.
Our direct deals do include programmatic guarantees, but advertisers looking for a private marketplace aren’t going to get the same scale. We do usually have a very minimal amount of impressions left over from direct deals that we make available programmatically, but it’s a very small part of the business.
When did Canela start producing original content?
A lot of ad-supported video-on-demand libraries are heavy on licensed content. When Canela launched, we started with 20,000 hours of licensed content.
But we realized that different Latin American populations have different content needs. They’re looking for strong cultural cues. So we decided to start moving into original content when we secured Series A funding earlier this year.
We started with original newscasts, because of a strong Latino demand for quality local news. But we’re working on adding many more original titles. We just announced we have over 570 hours of original programming planned for our Q4 lineup this year.
Does Canela consider non-Hispanic-owned streaming services with less Spanish programming, like Netflix or Peacock, as direct competitors?
Yes – everyone’s a competitor.
Our bilingual audiences aren’t just watching multicultural networks, they’re also watching CNBC and other English channels, and those large providers have deeper pockets than us. So we’ve had to strategize about where to invest and we decided that our best bet is innovation.
We understand the complexities of the Latino community, and so we can create products that are more attractive to them, especially original content.
This interview has been edited and condensed.
For more articles featuring Isabel Rafferty Zavala, click here.
