(FROM THE WALL STREET JOURNAL 5/20/15)
By Mike Shields
Ad buyers say that the connected TV landscape, at least in its
current state, can be a messy, disjointed place to run ad
campaigns.
And once Verizon Communications Inc.'s $4.4 billion deal for AOL
Inc. becomes official sometime later this year, that will likely
still be true, agency and advertising technology executives say --
at least for the time being.
Among the rationales for the Verizon acquisition, according to
AOL Chief Executive Tim Armstrong, is to exploit the anticipated
growth of the connected TV business.
"This deal creates a very significant network for mobile and
OTT," said Mr. Armstrong, referring to over-the-top television
streaming. "We want to fuel the brand advertising space."
When it comes to OTT and advertising, that nascent sector could
use some fueling. The sector represents a mishmash of outlets, from
pay-TV providers to media companies to TV manufacturers to OTT
device companies such as Roku-- all of which have some access to TV
app ad inventory. "It's confusing and scattered," said Darcy Bowe,
vice president of media direct, Starcom MediaVest. "There is no one
place with scale."
Jayant Kadambi, chief executive at Web video-tech firm TuMe,
echoed this sentiment. "OTT advertising is small for us, and we've
been there the longest," he said.
At least initially, ad buyers and ad technology executives say
they aren't quite sure just how the Verizon-AOL hookup creates much
scale in the near term.
Some see potential in Verizon taking AOL's ad
technology--particularly the Web video-centric platform
Adap.tv--and extending it to Verizon's own connected TV apps, along
with its FiOS pay-TV service, to help sell more targeted video ads.
But as Ms. Bowe noted, Verizon FiOS isn't in several major markets
and has fewer than six million subscribers.
This summer, Verizon plans to launch a video service aimed at
cord-cutters that theoretically could use Adap's ad infrastructure.
But Mr. Kadambi said ad technology built primarily for Web video
may have to be adapted to work well with mobile or connected TV
delivery systems.
"It's going to take time to get all that going," said Scott
Ferber, chief executive at Videology, another player in the Web
video ad tech world.
Still, if Verizon can take AOL's ad tech platform and establish
it as a viable means for buying and selling more ad inventory from
connected TV apps and even video on demand or linear TV, they could
entice more TV and Web video partners to transact via AOL, said
Mike Green, vice president at Brightcove, which specializes in
managing Web video content.
"It could become a flagship to rope other people in," he said.
"You could see Verizon and AOL saying, 'Hey, let us do this for
you, Sony Crackle, and you, cable company.'"
That sort of frememy collaboration is unusual in the TV world.
But it is rather common in digital media, where Google Inc. helps
companies across the industry deliver and even sell ads while
competing against them for ad budgets.
"Google has done such a great job creating a network effect with
its platforms," said Bill Wise, chief executive at Mediaocean.
"That's where I could see this going."
Right now, it's anybody's guess where the Verizon-AOL merger
goes. And it isn't likely to be clear on day one.
Michael Bologna, president of Modi Media, a data-centric
division of the media buying giant GroupM, sees potential in the
Verizon-AOL combination in terms of better targeted TV advertising
-- eventually.
"This could really further the journey towards data-driven
television," he said. "These things just take so much time. This
stuff is not easy."
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