Written by Programmatic buying is a hot topic in the digital media world, but recently a new “audience-buying” platform called AudienceXpress has been making the headlines on Madison Avenue as it rolls out an automated system enabling agencies and their trading desks to serve ads into the most premium network television inventory.
Because of its implications for the overall media marketplace, the rapid rise of programmatic trading in online display advertising has been one of the most closely watched developments of the past couple of years, splitting Madison Avenue and its media supply chain into two philosophical camps: Those that want to preserve the world of old-school media-buying based on relationships and person-to-person negotiations; and those who want to shift to a new world of “audience-buying” based on scientific, real-time, transparent programmatic technology enabling brands to reach the audiences they are seeking with their precision at that exact moment they need to reach them.
The fear of losing control over the value of advertising inventory has been the major impediment to programmatic exchanges in the online business, but that hasn’t stopped the online display market from developing a marketplace based on sell-side machines trading with buy-side ones.
While supply was a big factor in the success of programmatic trading online, other big factors including the needs for agencies to improve their margins by utilizing technology to automate the way they buy in an increasingly fragmented media marketplace, as well as their philosophical shift from old school “media-buying” based on the seller’s inventory to the new world of “audience-buying” based on reaching the consumers that their clients’ brands want to reach with their ad messages.
According to the most recent estimates from Interpublic’s Magna unit, programmatic buying of media currently represents about 25% of online display buys, and is growing fast.
Since it went live in January with a beta being used by the trading desks of at least two of the biggest agency holding companies, AudienceXpress has already served nearly 2 billion ad impressions to network TV viewers nationwide — all below the radar of most of the TV advertising industry
One of the first adopters of AudienceXpress are cable operators because the platform gives them an incredibly efficient means of selling their TV advertising inventory to national advertisers in a way that does not cannibalize on the local and regional buys sold by their direct, in-house sales organizations.
The system essentially enables local cable operators to efficiently and automatically pool the local TV advertising avails they split with their cable network partners into an audience trading platform that taps the budgets of national advertisers. In other words, it enables local cable TV operators to compete directly for ad budgets with the national advertising sales organizations of their network affiliates. Generally, national cable TV networks give two minutes per hour to cable systems to sell as part of their distribution agreements.
Programmatic trading has quickly matured on Madison Avenue, and every major agency now has its own trading desk, or works with an array of independents. Almost all of them claim to be either currently buying or close to developing a solution for buying TV advertising inventory through their systems. At least two are doing so already.
In the minds of most TV folks, real-time bidding means devaluing your inventory, The AudienceXpress value proposition is to provide liquidity — largely for the sell-side — by applying
technology on the back-end and the front end, and then layering on audience data that increases the value of that inventory to advertisers.
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