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The Parallel Infrastructure: Why Premium CTV Publishers Are Building Outside the Programmatic Stack
00:25:47
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This podcast is brought to you by audiohook, the leading independent audio dsp. Audiohook has direct publisher integrations into all major podcast and streaming radio platforms, providing 40% more inventory than what could be accessed in omnichannel DSPs. What's more, audiobook has full transcripts on more than 90% of all podcast inventory, enabling advanced contextual targeting and brand suitability. Audio Hook is so confident that in addition to CPM buys, they offer the industry's only pay for performance option, where brands can scale audio and podcasting with peace of mind. Mind knowing they are only paying for outcomes. Visit audiohook.com to learn more. That's audiohook.com. Hi, this is Ari Paparo. We're happy to bring you another recording from our recent Architecture Live event in New York. This is a group conversation, we don't
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want to call it a panel with
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Philippe Engelbrecht, the co founder and CEO of Tatari, Bill Murray, the head of growth and performance for wbd, and Mike Reedy, the senior vice president of ad sales for NBCUniversal. I am moderating them and they're going to be talking about we had a great conversation to talk about video and CTV and the perspective of the broadcasters and publishers about making inventory available in direct form versus indirect form.
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I hope you enjoy that.
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A
We have a lot more market live conversations coming on this podcast channel, on the EdTech God podcast channel and on YouTube. So we hope you enjoy that.
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B
All right. So Philippe, you've been thinking a lot about this idea of the CTV market and how it's some of its biddable, some of it's non biddable. Tell us what your point of view is on the kind of the size of the market and how it kind of shapes up different kinds of ways of buying.
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C
Yeah, in these things it's complex and so it's good to provide some context. The TV advertising market in the United States is $90 billion a year. The split between streaming and linear is equal when it relates to viewership, but with respect to ad dollars, it's not. So it's still about $60 billion in linear. The remaining $30 billion is streaming. So that's kind of we often think it's the reverse, or we tell ourselves it's the reverse and it's not. If we then take that $30 billion of streaming and we unpack that and we look at the way in which that media is executed. Well, about a half of it, that's 15 or 15 billion dollars, is programmatic biddable. It's probably a slightly inflated number. There's. There's very often low quality inventory in there. In open biddable, there might be fraud. So it's a little bit less than that. That is also kind of the market in which the traditional DSPs like the Trade Desk will operate. And then there's $15 billion left. And that is the true premium quality inventory. It's either executed with direct insertion orders or dios. It's the manual way of doing business. It feels a little bit like stepping back in time, but there is an automated version of it which we all know as programmatic guaranteed. So that's kind of the market a lot of numbers hard to follow. But the crux is the majority of the high quality premium inventory is sometimes not accessible in the programmatic pipes.
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Right.
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C
So we've got to go direct.
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Sorry to interrupt. It overlaps too. The same piece of inventory might be available for sale in multiple ways, but it gets actually purchased through a guaranteed buy or something like that.
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C
Or direct.
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B
Or direct.
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C
Direct. That is the key thing here is that that's where the inventory can be found. And to put some numbers behind it at the tire, 90% of our media execution is always direct with or partner publishers, not programmatic.
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B
Right. And Mike, from the publisher's perspective, how do you think about your inventory products and how they work together, how to separate the inventory out?
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D
Yeah, it's a great question and I think for us it's not an or statement, but it's an answer statement. What we're looking to do is first of all, I'm trying to make NBC Universal easy to buy. So we truly have an activation agnostic approach. But I think a perfect example of, of how we avail our inventory can come from what we just saw with the Winter Olympics.
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B
Right.
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D
So a perfect example is from a streaming standpoint. You know, I can guarantee the date and the start times for both the men's and women's gold medal hockey games. What I couldn't guarantee is that both those games would go into sudden death overtime.
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B
Right, right.
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That's where having the opportunity to avail as much inventory in a quick automated fashion really gives advertisers the opportunity to capture that viewing and therefore the audiences and then for us as a publisher to monetize it.
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B
Right. So diving into what you're saying so there's. Does that influence the sort of packaging because the things you know are going to happen, you can sell in a certain way and the things that are more variable and you might use more programmatic on.
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D
Yeah, it's Again, it's an and statement. But for sure, if we could have a direct conversation with our advertisers where we're truly kind of understanding the goals and the audiences that they're going after, we can create guaranteed and package placements for exactly that.
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B
Right. And, Bill, how do you think about this in terms of, you know, the value of biddable versus the value of things that are direct?
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E
Yeah, I think from an inventory standpoint, all of our inventory is available both through Programmatic and Direct. So from the publisher's perspective, we don't necessarily discern value based on transaction type. I think the value to the advertiser is a very different position, though. You know, if somebody's targeting a specific audience and trying to achieve a certain outcome, you know, Programmatic Buy might be more valuable in that case. But if they are are interested in being in a, you know, premiere episode of the Pit, there's a particular value associated with that too. So from our standpoint, inventory isn't separated out by value or how premium something is. You know, subject subjectively deemed. It truly is just available. And like Mike said, we try to make ourselves easy to buy.
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B
Right. So there's value to biddable. Right. Audiences and being able, the flexibility. So how do you see the direct fitting in?
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E
Yeah, again, I don't view them as competitive at all. I think that they're very complementary. Again, we. From a direct standpoint, you know, very large, you know, cable presence, the upfront is a very important part of our year. And so a lot of that's associated with guarantees. We represent a lot of programming and sports where brands just want to be associated with.
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Right.
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E
There's a natural optimization that occurs if you're a food brand and advertising on Food Network. That said, again, I think with the reach that we have, the diversity of networks, the depth of catalog and diversity of catalog, oftentimes Programmatic is a pretty kind of an interesting transaction type. And in a lot of cases, it informs where direct buys will be made. Some people didn't know that the White Lotus would be where their audience would sit. They didn't know that 90 Day Fiance is where their audience sits. They learned that through Programmatic. That actually translates into more direct buys.
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Right. That makes sense. And so let's flip it. What are the benefits of the direct side? What are you seeing the advertisers and agencies asking for either one of you?
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D
I think, look, anytime we can have a conversation with our partners, we get to know more about their brand, understanding what their goals are, the audiences they're trying to reach allows us to scale those audiences on our platform and again guarantee delivery of them. But it also allows us to provide insights not only to how the campaigns are performing, but the viewership behavior of those audiences. So, like real time example of how we're doing that at NBC Universal, you know, we just came off of what we were calling our legendary February where in a 17 day span we had the super bowl, we had the Winter Olympics and we had NBA All Star weekend. And what we found is that 84% of the viewers that came to Peacock to watch one of those three events is now watching something else on Peacock. So we're having those conversations to say, hey, let's continue the momentum and the conversation with the audiences that you just had a great exposure with in one of those events and help you find other IP to connect with them on.
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I think I still have a free Peacock subscription for when I worked at Cock.
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D
Oh, we need to get you paying fast.
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What's your perspective? You mentioned fraud earlier. How do you contrast the direct and biddable?
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Yeah. And so my angle might be more from the brand's perspective. Right. And so for brands, I mean, standing out, of course, is the access, the guaranteed access to that premium inventory. No doubt. Take the super bowl as an extreme example. The other one, I mean, straight up, when buying Direct outside the Programmatic pipes, then there is no DSP and its fees involved, no SSV fees, no other fees, no fees on fees, no fees. All media is put to work and that matters. Yes, there's brand safety, zero chance of fraud. But the one thing I would bring up, and it's a little harder to explain, but ultimately the power of tv, the beauty of tv, is to buy reach, drive awareness at the top of the funnel. I don't mean this in a juxtaposing way, but if you think about Programmatic, it is a machine built for targeting, using auctions.
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Right.
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That just goes kind of against what I've just explained in buying Reach has a different good purpose. But so for brands who want to buy that mass, reach, I mean, direct is the way to go and that matters to them.
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B
Right. Also, is inventory visibility part of this? So both of you mentioned very premium brands, but I don't think I can just log on to a DSP and buy the pit, can I?
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E
No. And you know, one of the things that does get lost a bit in Programmatic is that buyer intent. Right. The direct relationship between a brand and a publisher. And the purest way to do that is through a direct relationship Right. Whether that's through an IO, if you're still interested in transacting that way, or through a platform like Upstream, it's something that we really encourage. We think that there is a unique value in associating brands directly with programs, genres of content or networks. The easiest way to do that is through a direct relationship.
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Yeah, absolutely. So, Mike, you talked about live events. Must have been a very busy February. I imagine the ad ops people didn't see their families very much.
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No, they did not. I think we had a war room set up where it was just, you know, three eight hour shifts around the clock.
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So how does live events fit into this dynamic? Because I know the IAB has and other groups have been investing a lot in trying to make programmatic work for live events better, but it has all these kind of problems technically, operationally, etc. So take us through the intersection on the business side of live events. Huge audiences, spikes versus what you sell.
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D
Yeah, well, I mean, I think taking a step back, you know, the way we're programming Peacock, which is a little bit different than some of the other providers out there, is, you know, we are focused on huge franchises that are very topical, that have a kind of a nowness feel to them. And we look at that in three different pillars. The first is current tv, and that's irrespective of if it's last night's TV the next day or if it's a Peacock original, because we have such limited duplication between those two viewers. To them on Peacock, it is an original. The second one is movies, and especially our Pay One window, which comes right after the theatrical release in 2025. That really started growing for us with big films like Wicked, Jurassic park, how to Train youn Dragon. And the momentum will continue in 26 with Wicked Part 2 and Super Mario Brothers. But then finally, from a live standpoint, I think what's really important to understand for brands in the room is that, you know, for us we have and we always have had a digital ad load or been serving ads dynamically that's not consistent with the marketplace. There are some publishers that do linear TV units purchase and pass those through to the digital platform. Yeah. So I think that's a big thing to. Just because it's available to a viewer doesn't mean it's available to a brand. And that's a really important aspect of availing that inventory so that it has a chance to not only be packaged from a guaranteed direct standpoint, but also from a biddable programmatic standpoint.
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So in the purchase order from the advertiser, they are expecting that the ad is going to be showed in linear and the exact same ad in the same slot would be on. On Peacock. Is that my understanding?
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So if you're. It depends if you're a publisher that does live linear pass through. That said, you buy a TV unit and you guarantee and measurement all in one into the streaming platform, whereas that is NBC Universal. Again, we're serving dynamic ad insertion, which we think benefits advertisers because it allows for things like targeting, automation and measurement that certain digital platforms have. Right.
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That makes sense. And the big events also, like movies like Wicked, you're going to have a big spike in viewership when it first becomes.
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Exactly. And that goes back to that nowness feel. Right. And I think the. There's this misperception that streaming has to be kind of, you know, this, this isolated or lowly lonely viewing experience. But if you kind of focus on the nowness of properties, what you're watching, other people are watching too. And you can have a conversation and ideally conversation about the brands that multiple people are seeing at the same time.
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Makes sense. Bill, you were going to jump in a moment ago.
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I was going to mention the fact that it isn't just sports that generate kind of the traffic spikes that people really desire out of the sporting events. I do think they occur so quickly. If you're looking at like a series, a seven game series, most publishers will program for five because there's an expectation the last two won't happen. And with all of those things, I think if you really want to secure that guarantees, direct relationships are absolutely the best way to do it. Sprinkle in programmatic in case you get some extra innings. Get to games six and seven.
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There's a little off topic, but I heard this whole story about how the NFL for, for the super bowl has kind of a war room just in case it goes into overtime and they like have red phones and call all the advertisers as quickly as possible to fill it.
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Yeah. A couple years ago we had a plan in place. Right. Like that would have been a great thing. But again, goes back to what we saw with the Olympics and like two gold medal games going into sudden death overtime.
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Right.
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It's wild though. You'll be rooting against the team.
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Tie it up.
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Yeah. Let's get to game seven.
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We'll have brands put in backstop orders.
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Backstop order, absolutely.
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Ready. Ready to fire.
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They have to get approval from their. From the agency needs to get approval from the Brand just to keep.
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This is all set up before. Yeah, there's nothing is left.
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B
So Philippe, you launched your upstream platform recently that addresses a lot of these issues. Why don't you tell us about that, how it's going, what the point is of the whole operation.
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Yeah. So upstream is a new product that we launched. Maybe just quickly. Before I say what it is, explain why we did it. Right. I mentioned to the importance of these direct relationships and buying. We actually observed that 90% of our streaming buys came from the same top 10 publishers. And when supply is that concentrated programmatic technology or even principles didn't necessarily make good sense for us. So we built upstream. And upstream from a technology point of view is a direct integration into the ad servers of those key publishers. So we bypass all things programmatic. It's almost like a parallel universe or as was put in the press, a parallel operating system for media execution alongside programmatic. That's a mouthful in plain English. If you're a publisher, those direct insertion orders, we take out all the manual components, they're now fully automated. That means you can work fast, you can work accurately, you can work in smaller portions if you want. It's no longer for the big, big buys. And above all, if you're a brand now, you can partake and find that inventory, even if you're small, without the hurdles of manual that sat before it. So I just want to be clear, this is not some type of supply path optimization with, I don't know, a header bidding, which is just more programmatic or worse, curation. That's not what we do.
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Curation's worse.
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I mean, it's new tech. Embarrassingly, we worked on this for two years. That's how long it took us to put it together. And of course we were incredibly proud to launch not just with our friends from NBCU and Warner Brothers, but also to be Paramount and Disney.
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I've written about this, that there's this sort of misconception that CTV and display advertising are similar because the CTV market's very concentrated. You said 10 publishers. Do you have a sense of how much of CTV those 10 publishers represent? It's a lot.
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How much of CTV temper the top for us? I mean 90%. It's what people. I can ask a rhetorical question. What did you watch last night? It's limited to probably 10 publishers.
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Yeah, I don't have a lot of free time nowadays preparing for that. But in theory I would have watched the Pit or something on Peacock. Right.
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Obviously my point. Yeah.
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B
So from. From the publisher's perspective. Either one of you like how take us through a little bit of your sales motion as it relates how you would bring, how you would address the desire for this sort of direct buy tech versus the old way of doing direct versus linear. Like I'd love to get like a little bit of behind the scenes. What's it like selling this and what the relation is with the buyer.
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D
Yeah, well, I'll take this. Okay, so for us. Well, first of all, I mean Tatari has been a great partner of NBCUniversals for the last several years and some of those legendary February events I mentioned you had brands partaken, so thank you for, for that Philippe. What I would say that, you know, for me specifically my role is to lead the sales efforts against performance agencies and performance advertisers and usually that's meaning small and medium sized businesses.
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A
Okay.
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So any way I can lower the barrier of entry to get new advertisers into CTV space that maybe are currently social first or social exclusive? That's my goal. And so with a partner like Tatari and what we're doing with Upstream, you know, Philippe just mentioned it like they have a roster of brands that I have yet to partner with because maybe they didn't reach the minimum spend thresholds that I have for my direct IO business. But this now allows me to create new brand partners and because it's direct, provide some of those insights, recommendations to continue growing them. And I think anytime in the process where you're able to, you know, remove friction, create more automation and just make it a seamless experience like that is what we're about at MBC Universal.
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B
Right? Any thoughts on that?
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E
Yeah, we, I mean, pretty similar there. You know, again, Tatari has been a fantastic partner for, for a long time. This is, Upstream represents a new avenue for advertisers to establish that direct relationship with us efficiently and allow us to provide that premium inventory in a guaranteed manner. It is we think a very valuable kind of tool in the tool set. But generally, you know, we're not, we're agnostic. Right. We're relying on the advertiser to tell us how they're interested in transacting. We may encourage one path or another if we think there's a benefit. Right. If there are efficiencies gained here and they're interested in securing inventory. But it really is a kind of a balancing act across transactions for the most part.
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B
Are they different advertisers or do you have overlap? Same advertiser wants to go different. Both channels.
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E
Yeah, I mean There are very few advertisers that work with us, that are only working with us through direct or through programmatic. Most advertisers, especially when we get into the large brands, even through the same transaction type, they're coming, are actually establishing relationships with us through various partners. So it's kind of interesting managing those and helping advise honestly how they can get the most use out of the inventory we have with the connection points there, trying to manage.
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B
Right. And Philippe, this product actually was a result of an acquisition. I remember you told me a couple months ago, a little history you've been working on for two years. If you want to take us through any of that, that'd be interesting. But also, where is it going next?
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C
Yeah, indeed. It came from an acquisition. We acquired an SSP which was kind of fully geared towards ctv. Squeaky clean, but always with the intent to build new tech. Right. And so that was the past. Going forward, you can never rest on your laurels. We got to work it out. So most obviously we launched with five top publishers. There's a handful of other ones that of course have expressed interest and we've got to take care of that. That's the most obvious. The other piece, which is interesting, and those conversations are just starting now, is if you look at upstream, it's only available to the 400 or so brands and agencies that operate on the Tatari demand side platform. And so the automation, which we just kind of touched on earlier, is value. And so when we built technology, we wanted to be used. Right. So we could definitely see a world where we potentially open this up to the benefit of our publisher partners and where they can facilitate other demand, and that's early. And then the next version beyond that, which is even more exciting, we are running successful tests. It's a lot harder to explain, but if we look at Upstream and we inject into all of that what we call our performance data, essentially years of media and performance outcomes and the like, and then we run machine learning on it, we can potentially help our publishers send the impression to the most fitting brand in a way that goes beyond what's available through publisher targeting or DSP targeting. And so that's something we're testing into with great promising results and so full steam ahead.
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B
That's actually kind of the opposite of conventional wisdom. You might think that if you want performance, you want programmatic, so you can pick out the exact impressions you want. And if you want brand, you want direct. Are you saying, do you think it's going to be the opposite or do you think both have a role in
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C
performance, Both have a world? Absolutely. I mean, we do programmatic, 10%. Right. So retargeting is always a sliver of any campaign. And for that, you're going to have to work in the programmatic space as an example.
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B
Right. Retargeting doesn't lend itself to direct. Right. And so, Mike, any thoughts about how this is evolving? Do you see this as a growing part of your business? Do you. Do you see any changes in the behavior of the marketplace?
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D
I definitely see it as a growing part of our business. Again, I'm tasked with ensuring that we are diversifying our advertiser base. And back to my point about lowering the barrier of entry and kind of the misperception. Misconception. And I'm glad Philippe just brought that up because in addition to sometimes hearing that, oh, it's too expensive, there's also this misperception that CTV cannot drive lower funnel metrics and conversions. And I think as we build out solutions and truly prove out the efficacy of the platform, that's just going to continue to grow the overall advertiser base.
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B
And, Bill, what are you seeing moving forward? Do you think this is going to become kind of a key part of your sales strategy?
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E
Yeah, yeah. Look, again, our intention is to continue to establish direct relationships with advertisers, move them out of open exchange, kind of buying mindsets into focusing on where values driven and where they can feel comfortable that their brands are represented. I can't imagine a world where there's not programmatic and direct.
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B
Right.
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E
The distributions may shift a little bit. The means by which the relationships are established, those might change. But, yeah, I think they're both going to continue to work in concert.
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B
All right, this is a great conversation. I learned a lot. I want to thank Bill, Mike and Philippe for joining us. So thank you so much. Give them a round of applause.
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D
Thank you.