https://youtu.be/N0ElpHUANfE
TV networks globally must begin allocating a portion of their ad slots to be bought programmatically says the man charged with overseeing how IPG Mediabrands’s $37bn in media billings is spent.
In the second part of a video hangout with Mumbrella, Chris Williams, global president of Magna Global warned: “Ultimately a huge proportion of media is going to be transacted this way – programmatically – within five years.
“If I were in (media) sales I would be embracing it quickly. Probably more quickly than some TV networks around the world are because I think it is a huge threat to them if they don’t allow data and technology to be more precise then advertisers will otherwise look for that elsewhere (in other media).”
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Williams’s comments came in the second part of an interview in which the senior IPG Mediabrands executive also warned audience measurement companies around the world they must “lift their game” on the issue of measuring audience across TV and online video devices.
Globally many television networks have been reluctant to trade television programmatically, concerned that it will hurt their yields and commoditise their product, but are increasingly coming under pressure from media buying agencies who want to buy all ad inventory more easily and efficiently across various platforms.
In the interview he noted how for Mediabrands programmatic trading was now happening in some form in 68 countries and had evolved a lot in just a couple of years.
“Programmatic has grown substantially for us and we have been doubling it every year for the last three years – in terms of billings for us,” said Williams.
“It has moved from a real time bidding (RTB) model that was done in open exchanges to now where it is multiplatform and we are seeing a huge shift where it is being executed in TV and is part of the conversation we are having here – around how much of the inventory that you want to sell to us can we buy in a programmatic like way.”
Williams also expanded on his comments about the evolution of television consumption noting that streaming video on demand (SVOD) services were now seeing huge penetration in the US.
“We do try and identify where the audiences are migrating to,” said Williams. “(Streaming) has gotten huge in the US – forty per cent of homes here have some sort of SVOD solution whether it be Hulu Plus, Netflix etc.
“What is interesting is seeing how the TV networks respond. Obviously they supply TV content to both Netflix and Hulu – how long that is going to go on I don’t know.”
The Magna Global boss said while take up was significant most consumers were not axing their pay-TV subscriptions, however this did not meant that SVOD did not present a risk for traditional TV players.
“Whilst SVOD is attractive to consumer it is supplemental to their cable subscriptions – at least in the majority – apart from some younger audiences who might ‘cord cut’ as they call in the US,” he added.
“You’ve got to be able – whether its subscription only or traditional television – to monetise where the eyeballs go to. SVOD is a potential threat to TV networks if you look at the threat that’s happened in the US and this will be happening in other countries where we have seen up to 10 per cent declines and huge shifts to subscription.”
Williams also commented on the New York Times’s push into video telling Mumbrella: “Any media owner that has good brand equity and strength in the area, and I think the New York Times does, then they have got a receptive engaged audience that will seek out the content they have.
“If you look at newspapers in the last 16 years – back in 1999 the share of revenue that newspapers took globally was equal to TV at 35 per cent. TV has actually increased while newspapers by 2019 will be 10 per cent – that’s a serious, serious challenge to their business model.
“If you talk to the likes of Conde Nast and The New York Times they have moved into video. Everyone wants to tell stories – and they have good journalistic credentials so they can do that be it online, in print, or in video.
“The challenge will be ok you can tell good stories in video can you monetise that. If they can monetise that then they will survive and if they can’t then they won’t. Every responsible media owner who has aspirations to survive is moving into video.”
Tajer
Asked about the recent elevation of Australian Henry Tajer to the role IPG Mediabrands global CEO Williams noted that he thought some of the agency boss’s “Australian qualities” such as “no BS” had helped him secure the role.
“Talent know no borders and no borders or boundaries. If you are talented you are going to get noticed – and Henry was noticed in our network – and is now global CEO,” he said.
“He has an instinct for media, he understands the current and future dynamics of media very, very well, and I think he has a passion media and you combine that with traditional Australian qualities – which are: straight talking, competitive hard working, no BS – that’s a great combination.”
For a timeline of the questions:
- 0.40 – Digital migration and the rise of SVOD
- 3.00 – TV’s advantage over SVOD
- 4.00 – How SVOD might be a threat to television networks
- 4.40 – Can the New York Times be a player in premium video space?
- 5.50 – The structural challenges for print publishers.
- 7.00 – The media push into video
- 9.00 – IPG Mediabrand’s global push in programmatic
- 10.00 – The push to buy TV programmatically
- 12.30 – How Henry Tajer got the top job at IPG Mediabrands
Note: This is a two part interview. To view Mumbrella’s interview with Chris Williams discussing last week’s Newfronts and the challenges of cross media measurement in television, video and online click here.
Nic Christensen in New York
