March 26, 2015, 9:36 AM
PHOENIX -- In an important milestone for the burgeoning programmatic TV marketplace, ESPN will become the first major television network to provide a proprietary data management platform (DMP) enabling advertisers and agencies to plan and buy its programming based not on traditional sample-based TV ratings, but in a way that is akin to how agencies and trading desks buy audiences online.
Speaking on a panel Wednesday morning at MediaPost’s Programmatic Insider Summit here, ESPN Vice President of Digital and Publishing Sales Zachary Chapman said ESPN will officially unveil the DMP within the next three weeks, and that it would be introduced in phases, with the first one being “figuring out how to integrate with any set-top data out there.”
This is significant because the data from TV set-top devices serves the equivalent role that data from a user’s browser plays in Web, social and mobile audience targeting, and is the integral building block to append all other data -- so-called “first-” and “third-party” data -- about the user.
ESPN’s move comes as the role of data platforms is gaining interest in the TV business. Recently, TV ratings giant Nielsen acquired one of the last significant independent digital DMPs, eXelate, for $200 million -- and is in the process of figuring out how to integrate it with its online, TV and so-called cross-platform audience data. Some observers saw Nielsen’s move into the DMP space as a logical line extension, while others deemed it a hedge for a day when advertisers and agencies might abandon sample-based ratings in favor of data on empirical user behavior.
A number of companies have been effectively serving as DMP proxies for targeting TV audiences on a similar basis -- most notably Simulmedia, which uses data and technology to make an arbitrage market out of buying undervalued TV inventory, enhancing it with audience data and reselling it to advertisers looking to reach those audiences.
Other TV inventory middlemen, including Visible World’s AudienceXpress have been developing proprietary DMPs in an effort to enhance the audience value of unsold local cable inventory that it repackages into so-called unwired network buys for national advertisers.
But the move by ESPN, arguably one of the most valuable and desirable suppliers of TV and digital audiences to Madison Avenue, is the most aggressive move yet by a direct programmer.
One big question for ESPN is why advertisers and agencies should trust the data it generates via its proprietary DMP when its goal is to find better ways of generating revenue from its audiences. In the digital world, DMPs generally operate as independent, neutral players between the so-called “demand-side” (advertisers, agencies and trading desks) and the “supply-side” (publishers, ad networks and exchanges).
“I don’t know why anyone would trust us,” acknowledged ESPN’s Chapman during the question-and-answer session that followed his panel, adding a rhetorical answer: “Why does anyone trust Facebook? Why does anyone trust Google? They trust them because they created a marketplace.”
Chapman added that ESPN hopes to create a “level of transparency” with its DMP, then give advertisers the confidence to rely on its data to target consumers more effectively. He said ESPN’s goal is to create a “clean, well-lit environment” where both the buy- and the sell-side can look at the value of the audiences that ESPN delivers in new and presumably more valuable ways.
He gave an example of ESPN inventory that currently might be undervalued -- spots running in the wee hours of the morning that would normally be sold as “remnant” time to direct-response marketers at a fraction of the rate a brand marketer would pay. Chapman’s example was that by using a DMP, ESPN might be able to uncover the fact that instead of being simple insomniacs, the audience is actually a group of young men with the munchies looking to order a pizza.
“Why is that a DR play?,” he asked the summit attendees, adding: “Four guys sitting around a room wanting to order a pizza?” He said it was actually the “ultimate Dominoes audience,” and that the pizza marketer should look at that inventory as being some of ESPN’s most valuable.
ESPN has already been a leader in the fledgling programmatic TV industry, and the DMP rollout seems to be the next logical extension for it to leverage the value of its audiences in a more sophisticated way that is consistent with the way the digital programmatic marketplace works.
The sports network made waves earlier this year in the data-driven TV targeting space when it ran a programmatically sold ad during "SportsCenter," the network's flagship show.
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