By Daniel Church, Head of Advanced TV Product at Beachfront
Let’s just say it: Buying TV ads is challenging. It’s way too hard.
Time was, the big cable companies like Comcast, Altice, and Charter would have massive sales teams that would strike deals with smaller cable distributors and rep their inventory in exchange for a cut. They would go to a regional cable provider, for example, which had 250,000 subscribers and say, “Here’s a check for X million dollars. I’ll give you 70% of everything I sell above that.” It was a great deal for the small cable companies and the big guys, and advertisers got simplicity and scale with their buys. Everybody was happy.
Fast forward to today, and the small cable distributor subscribers are getting even smaller. The big cable companies are hawking less of their inventory, focusing instead on selling their own supply. They’ve changed their tune to: “I’m no longer giving you a guarantee. I’ll give you half of whatever I sell—if I sell it.” These distributors have hired sales teams to sell their own inventory to survive—and the upshot is a nightmare for TV ad buyers that want to tap into these environments.
Now let’s be clear, linear cable TV subscribers are falling, but there are still 74 million of them in the U.S., and those 74 million people watch a lot of TV and buy a lot of stuff. So if you want to buy linear TV and reach highly-engaged local audiences, linear cable TV is still a killer channel for brands and advertisers.
The caveat is you now have to wade through an increasingly fragmented landscape—one that is awash with less experienced sellers and a lot of hassles. The market is becoming a lot more fragmented, which means a lot of people are advertising on big cable providers and ignoring the rest.
This is an area where TV buying has moved backward over the past five years.
The cable marketplace has become fragmented and slow. It can take two weeks to understand what inventory is available for each provider and another two weeks to get it executed. The linear TV buyers at some performance agencies, for example, have hundreds of people aggregating reports from all of these different cable companies. Hundreds of people!
So if you want to buy linear TV and have a product that relies on this audience, it’s harder to activate inventory. It’s taking more resources, it’s harder to set up—and reporting happens at least a week after the campaign has ended, so you’re not even sure what’s been served until well after the fact. And you need more buyers to talk to more sales reps to get to any kind of scale. You get the idea.
A lot of these cable companies have never had to sell inventory directly. They don’t understand the advertising considerations. Linear TV is expensive—not just to buy, but also to sell and service. Somebody on the cable side has to fill a schedule of ads, and this could come from multiple places. It’s insanely manual. Eventually, they also have to send that information back to the buyer, which is also slow and process heavy. And they do this every single day. Rather than invest to make legacy systems interoperable, many of these cable distributors are also trying to shift to the streaming side of things, which leads to even more fragmentation.
We feel their pain. And (shameless plug here) it’s this pain that we’re trying to fix with Beachfront. We integrate directly into the cable providers’ servers or headends. That allows cable companies to either do a channel carve off which tells us which channels they’re not currently monetizing. Or they can put something in the schedule (a category code) that says a channel or spot is approved for real-time sale.
When a cable TV headend reads that category code, it initiates a call, and it’s programmatically optioned and sent back within two seconds. In other words, we get a call to air an ad and in two seconds, figure out where it should go. And then immediately after it airs, we can generate a report showing it went live and what it cost. If we can’t fill an ad spot, we replace it with a direct response ad that the cable provider would have been running anyway, so there’s no downside.
Whether it’s ours or someone else’s, these kinds of solutions are the future for all cable providers. Advertisers want to meet consumers where they are, which means they want to run on linear TV and connected TV (CTV), but they don’t want to pay for the overlap if they’re reaching the same audience twice. So if you run an ad 50% on linear, you want to be sure you can reverse-target on digital and CTV too.
It’s not magic, but for many cable services, it’s the next best thing. And for advertisers, it takes an awful lot of the pain out of buying linear TV.