OTT ad spending is on the rise, but there are a few things holding back the floodgates from really opening: measurement and educating TV buyers on the benefits of audience-based buying.
TV advertisers, particularly in local markets, tend to have preconceived notions that need to be exploded about where to reach consumers.
“Local car dealerships, for example, are accustomed to buying linear on cable TV on a recognizable network, but people are adopting new services,” said Adam Helfgott, CEO of MadHive, a blockchain-based TV ad tech company.
“There’s still this education that has to happen in terms of audience-based buying, because someone might be watching on Pluto, for example, but the content they’re watching is from AMC,” Helfgott said.
AdExchanger spoke with Helfgott and Christiana Cacciapuoti, SVP of marketing and innovation at MadHive and executive director of the AdLedger blockchain consortium.
AdExchanger: What exactly is MadHive?
CHRISTIANA CACCIAPUOTI: We’re an ad tech platform that powers modern media. When we first started out we focused on local reach extension. Broadcasters are smart, and when ad-supported streaming platforms came along they saw the threat to their business and realized that none of the [AVOD] platforms had boots on the ground in local DMAs. They wanted to extend their reach beyond their own inventory into streaming platforms and add in a data-driven play.
But there wasn’t a technology platform to natively support that from start to finish. We grew up doing that and it’s made us suited to finding those needle-in-a-haystack customers in local markets for national and, increasingly, DTC brands. It’s not easy finding, say, millennial moms in Biloxi, Mississippi who watch PlutoTV and are interested in a specific product.
How has the platform evolved?
We’ve become almost like infrastructure-as-a-service. In the course of building out the platform, we had to do a lot of hard infrastructural work, all kinds of data integrations and data science to keep billions of rows of data in hot storage. We also had to create complex access control systems, because we weren’t only serving our broadcaster customers directly, but also the local markets of that broadcaster. We might be working with ABC corporate, for example, but ABC New York also needs a login and so does the advertiser, say, a Ford dealership on Long Island.
That gave birth to an offering that allows other companies, including brands, to build bespoke products on top of that unsexy infrastructure work we’ve already done.
What are some examples?
ADAM HELFGOTT: EW Scripps has an OTT targeting product in market called Octane which is built on the MadHive platform, and so is Premion from TEGNA. This is part of what we’re beginning to call the “Madhive Cloud.” Broadcasters can either work with us on product development or their own product people can use us just like one might build on AWS and then stream their data into their own on-prem cloud architecture outside of MadHive.
You mentioned that you’re starting to work with more DTC brands that want to buy TV. What are they looking to achieve?
HELFGOTT: The medium where consumers watch no longer matters, and so broadcast groups that sell linear are moving over to OTT.
But we’re working with DTC customers who are using OTT first, because it helps their cost per acquisition significantly, and then they’re looking at buying spot cable or linear after that, which is inventory they’ve often never bought before.
So, it’s sort of like the opposite of what large advertisers do, which is make a big TV buy and then add in a little reach extension on OTT.
HELFGOTT: We’re flipping that idea on its head. Digital-first brands are filling in the blanks with legacy media, whether that’s linear TV, radio or or out-of-home. It’s working well for them and it’s monetizing well for the publishers of legacy media as they transition to digital.
And where does blockchain come into it, and what exactly is AdLedger and MadNetwork?
CACCIAPUOTI: Along with TEGNA, MadHive is one of the founding members of AdLedger, which is a totally independent nonprofit consortium that’s building out open source technical standards, quite like RTB. The hope is that cryptography will be our open source standard. We have about 90 members from across the industry, including Meredith, Hearst, Hershey’s and all of the big holding companies who are collaborating on how to fit blockchain and cryptography into media and advertising.
MadNetwork is a sister company to MadHive, and you can think of it like the Linux Foundation or the Ethereum Foundation. It’s an open source blockchain that’s designed for enterprise use cases.
CACCIAPUOTI: There are three things we want to do with the first iteration. One is to create mutual identity for supply chain participation so that there is technical proof that shows who the people are in a transaction. With that, domain spoofing would go away overnight.
The second piece is cryptographically linking IDs into a verifiable chain of custody as well as identifying how much value participants take out. That’s an efficiency play as much as a compliance, consent and privacy play. And the third goal is creating mechanisms for public access and validation. We’re launching a proof of concept that will allow publishers to encrypt their first-party data and give parties with permission downstream to decrypt it later.
We always get the question, “When will blockchain be able to keep up with the QPS of ad tech?” Well, that’s what MadNetwork is designed to do: support and solve that type of hard problem.
This interview has been edited and condensed.