{"id":134,"date":"2021-01-06T08:00:46","date_gmt":"2021-01-06T13:00:46","guid":{"rendered":"https:\/\/advertisingweek.com\/aw360\/2021\/01\/06\/the-tv-ecosystem-cannot-support-the-supply-chain-economics-of-the-open-web-dsp\/"},"modified":"2021-01-06T08:00:46","modified_gmt":"2021-01-06T13:00:46","slug":"the-tv-ecosystem-cannot-support-the-supply-chain-economics-of-the-open-web-dsp","status":"publish","type":"post","link":"https:\/\/advertisingweek.com\/aw360\/news\/the-tv-ecosystem-cannot-support-the-supply-chain-economics-of-the-open-web-dsp\/134\/","title":{"rendered":"The TV Ecosystem Cannot Support the Supply Chain Economics of the Open-Web DSP"},"content":{"rendered":"<!-- shortcode [asyncjs] -->\n        <script type=\"text\/javascript\">if (!window.AdButler) {\n                (function () {\n                    var s = document.createElement(\"script\");\n                    s.async = true;\n                    s.type = \"text\/javascript\";\n                    s.src = 'https:\/\/servedbyadbutler.com\/app.js';\n                    var n = document.getElementsByTagName(\"script\")[0];\n                    n.parentNode.insertBefore(s, n);\n                }());\n            }<\/script>\n        <script type=\"text\/javascript\">\n            var AdButler = AdButler || {};\n            AdButler.ads = AdButler.ads || [];\n            var abkw = window.abkw || '';\n            var plc376252 = window.plc376252 || 0;\n            document.write('<' + 'div id=\"placement_376252_' + plc376252+ '\"><\/' + 'div>');\n            AdButler.ads.push({\n                handler: function (opt) {\n                    AdButler.register(167788,376252, [300,250], 'placement_376252_' + opt.place, opt);\n                },\n                opt: {\n                    place: plc376252++,\n                    keywords: abkw ,\n                    domain: 'servedbyadbutler.com'\n                }\n            });\n        <\/script>\n        \n\n<p class=\"wp-block-paragraph\"><strong><em>By Seif Hamid, Chief Partnerships Officer, MediaOcean<\/em><\/strong><\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">With every new phase of the TV landscape\u2019s evolution over the past decade, traditional capabilities have fallen closer in line with digital media. These steps toward greater addressability and accountability have been rightfully heralded in our industry for the new opportunities they open for advertisers. However, we\u2019re rapidly approaching a point where the parallels between the rise of digital media and the evolution of TV must cease. That inflection point revolves around <a href=\"https:\/\/www.emarketer.com\/content\/five-charts-explaining-the-ad-tech-tax\">the now-infamous \u201cad tech tax.\u201d<\/a><\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">As targeting and attribution within the TV space become more sophisticated, a number of companies are looking to translate their services and roles within the digital media landscape to the addressable TV environment. That\u2019s understandable, given <a href=\"https:\/\/www.marketingcharts.com\/advertising-trends\/spending-and-spenders-107665\">the nearly $200 billion opportunities represented by global TV ad spend<\/a>. However, when it comes to middleman roles, such as those played by DSPs in online display, the reality is this: The converged TV industry can not\u2014and need not\u2014support the hefty ad tech fee structure that has come to characterize open web digital.<\/p>\n\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Preventing Unsustainable Models<\/strong><\/h3>\n<p class=\"wp-block-paragraph\">Within today\u2019s DSP landscape, multiple companies are promising clients and investors that they are in the process of translating their models and services to the fast-growing world of converged TV inventory. The problem is that these platforms are built on a model that layers a substantial fee\u2014in some cases, around 20 percent\u2014on top of the media transaction.<\/p>\n\n\n\n\n<!-- shortcode [asyncjs] -->\n        <script type=\"text\/javascript\">if (!window.AdButler) {\n                (function () {\n                    var s = document.createElement(\"script\");\n                    s.async = true;\n                    s.type = \"text\/javascript\";\n                    s.src = 'https:\/\/servedbyadbutler.com\/app.js';\n                    var n = document.getElementsByTagName(\"script\")[0];\n                    n.parentNode.insertBefore(s, n);\n                }());\n            }<\/script>\n        <script type=\"text\/javascript\">\n            var AdButler = AdButler || {};\n            AdButler.ads = AdButler.ads || [];\n            var abkw = window.abkw || '';\n            var plc428354 = window.plc428354 || 0;\n            document.write('<' + 'div id=\"placement_428354_' + plc428354+ '\"><\/' + 'div>');\n            AdButler.ads.push({\n                handler: function (opt) {\n                    AdButler.register(167788,428354, [300,250], 'placement_428354_' + opt.place, opt);\n                },\n                opt: {\n                    place: plc428354++,\n                    keywords: abkw ,\n                    domain: 'servedbyadbutler.com'\n                }\n            });\n        <\/script>\n        \n\n<p class=\"wp-block-paragraph\">In the online display world, such fees have become widely accepted, as DSPs once played a vital role in the open web\u2019s programmatic ecosystem, where a brand\u2019s media plan commonly spanned thousands of inventory sources. Compared to TV ad spends, digital media\u2014particularly a decade ago\u2014tended to constitute a modest portion of ad budgets, and the fees required to bring scale to these expenditures became accepted costs of doing business in a fractured online landscape.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">In the TV realm, a 20 percent fee (or even a fraction of that) represents an unacceptable burden on brands that are already paying millions to appear alongside premium TV inventory. Advertisers simply cannot bear such fees, even when being more targeted in their campaigns, and publishers are in no position to absorb these fees on their end either. More importantly, the converged TV landscape doesn\u2019t require this added layer of complexity the way the nascent digital media landscape once did. A cleaner, more efficient, and more transparent supply chain is possible <em>today. <\/em><\/p>\n\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Avoiding Unnecessary Complexity<\/strong><\/h3>\n<p class=\"wp-block-paragraph\">The rapid evolution of the converged TV space will lead to greater complexities in its supply chain in the short term, but new players that add substantial incremental fees to the media-buying process will not stick around long. That\u2019s because the converged TV landscape boasts several key distinctions when compared to the open web, where intermediaries have thrived and associated fees have soared.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Unlike the open web, the TV landscape is built almost exclusively on premium content and viewing experiences, around which publishers are understandably unwilling to relinquish control of ad inventory quality. Furthermore, there are far fewer publishers at play in the TV landscape, and that enables them to maintain their inventory within closed ecosystems. Even as TV makes the leap to OTT and enables greater addressability within its advertising, marketers simply don\u2019t require DSPs to aggregate inventory the way they did within the far-more-fractured online display space. The introduction of programmatic capabilities to TV buying is a question of automated buying and selling processes, and does not by its nature entail the same open auction frameworks that led to CPM decreases in digital. TV publishers can provide sophisticated targeting and buying options on their own, and it\u2019s reasonable for advertisers to work with the major players without a substantial layer of middlemen between them and their ad placements. The DSP was the natural outgrowth of a digital display market based on real-time bidding for what was essentially limitless supply. TV supply is more constrained, more premium, and it comes from sophisticated sellers.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">The benefits of a cleaner supply chain are crystal clear: brands can track their investments with greater precision and accountability, leading to more effectiveness and cost-efficiency. The conditions of possibility for a streamlined supply chain are already there. The intervention of point solutions is unlikely to provide any incremental benefit when it comes to targeting, precision, or measurement.<\/p>\n\n\n\n\n<h3 class=\"wp-block-heading\"><strong>&nbsp;<\/strong><strong>The Simpler, Workable Alternative<\/strong><\/h3>\n<p class=\"wp-block-paragraph\">When it comes to converged TV, the question facing the industry today is this: How can you apply data to cookieless media without introducing huge incremental costs or impinging on privacy?\u00a0The answer is that rigorous audience intelligence and data science need to live natively within neutral buying platforms.<\/p>\n\n\n\n\n\n<p class=\"wp-block-paragraph\">Unlike in the digital media space, DSP\u00a0margins won&#8217;t be tolerated in TV\u2014nor will the margins associated with cobbling together complex stacks from point solutions.\u00a0To take advantage of the growing opportunities in the converged TV space, advertisers must leverage a modern system of record for omnichannel advertising that isn\u2019t reliant on a complex web of vendors that bring incremental costs to every transaction. For all its progress, TV remains substantially different from digital media\u2014and its distinctions will enable a cleaner, more efficient workflow for all parties.<\/p>\n\n\n\n\n<!-- shortcode [asyncjs] -->\n        <script type=\"text\/javascript\">if (!window.AdButler) {\n                (function () {\n                    var s = document.createElement(\"script\");\n                    s.async = true;\n                    s.type = \"text\/javascript\";\n                    s.src = 'https:\/\/servedbyadbutler.com\/app.js';\n                    var n = document.getElementsByTagName(\"script\")[0];\n                    n.parentNode.insertBefore(s, n);\n                }());\n            }<\/script>\n        <script type=\"text\/javascript\">\n            var AdButler = AdButler || {};\n            AdButler.ads = AdButler.ads || [];\n            var abkw = window.abkw || '';\n            var plc376253 = window.plc376253 || 0;\n            document.write('<' + 'div id=\"placement_376253_' + plc376253+ '\"><\/' + 'div>');\n            AdButler.ads.push({\n                handler: function (opt) {\n                    AdButler.register(167788,376253, [300,250], 'placement_376253_' + opt.place, opt);\n                },\n                opt: {\n                    place: plc376253++,\n                    keywords: abkw ,\n                    domain: 'servedbyadbutler.com'\n                }\n            });\n        <\/script>\n        \n","protected":false},"excerpt":{"rendered":"<p>With every new phase of the TV landscape\u2019s evolution over the past decade, traditional capabilities have fallen closer in line with digital media.<\/p>\n","protected":false},"author":7,"featured_media":135,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","editor_notices":[],"footnotes":""},"categories":[1],"tags":[6],"topics":[2],"class_list":["post-134","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-tech","topics-editorial"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>The TV Ecosystem Cannot Support the Supply Chain Economics of the Open-Web DSP | AW360<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/advertisingweek.com\/aw360\/news\/the-tv-ecosystem-cannot-support-the-supply-chain-economics-of-the-open-web-dsp\/134\/\" 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