with Dan Ackerman, SVP of Programmatic TV at AOL
Verizon's $4 billion buy of AOL last year was initially a bit of a surprise to the industry, but made sense in the wake of the launch of go90, Verizon's mobile-first, ad-supported video streaming service. But although the provider is supporting digital advertising efforts around go90, Dan Ackerman, senior vice president of programmatic TV at AOL, says that the service is just one part of its broader portfolio.
In this interview with FierceOnlineVideo Editor Samantha Bookman, Ackerman discusses the holistic approach that AOL is taking to the advertising market, and how that strategy is making it much easier for both buyers and sellers to offer ad inventory at scale to help monetize the quality content that's in demand – as well as help traditional television programmers and creators approach the emerging crossroad where linear and digital video are beginning to meet.
FierceOnlineVideo: AOL recently held its Newfronts presentation in New York City. Do you see digital newfronts continuing or perhaps eventually merging in with the traditional television upfronts?
Dan Ackerman: I think it's undeniable that they are coming together. At least for the foreseeable near future there will be a separation of events. But now that the big programmers, the traditional broadcasters and cable networks, are taking such a lead role in developing the content that consumers want to see on digital screens, I feel like those things are really coming together.
NBCUniversal is probably one of the leaders in collapsing all of the events -- cable, broadcast and their digital initiatives -- into one large event, and I think others are going to follow suit. So we'll see more and more of those things combining and it's really one story about 'here's the quality content, here's the way that we're delivering it to consumers on any screen that they want, and here are the measurement products and the data products that they're leveraging on behalf of the advertisers to connect those two worlds' so a marketer has a more seamless view of how consumers are being exposed to advertising in that content, across all those platforms.
FierceOnlineVideo: The focus for AOL this year was less on 'here's what we can sell,' and more on the programming and how people use it. Why did you choose that strategy?
Ackerman: The consumer is driving where they want their content, so being able to highlight all the brands that are so relevant to consumers, where they're consuming that media on what screens and how those brands are meaningful to their lives, that's really the conduit to where we're delivering the content that they want. Highlighting those brands and how consumers are interacting with them seems incredibly relevant to the marketers and the consumers.
Being able to have people dive in and experience those touch and feel -- anything from how virtual reality is starting to permeate across those platforms, to the way consumers are driving the experience, seemed like the best way to connect our story to how we're delivering in market. It seemed to resonate with consumers and with marketers for sure, by the positive comments that were coming out of the event and certainly the client meetings that were happening around that event. It certainly resonated with them.
FierceOnlineVideo: So, consumers are still in the driver's seat when it comes to online video?
Ackerman: Absolutely. You see the rise in the consumption of long-form premium video in alternative devices -- television is still the driver, still drives the majority of video viewership on a daily, weekly, monthly basis. But we certainly can't deny the rise of video consumption on mobile and through alternative devices going through the television -- OTT, gaming devices. So we are certainly focused on making sure that the content is available on all those places.
Go90 is a great example, bringing together the best of online content and traditional television content, and packaging it up in a way that consumers, especially millennials, want to access that content -- anything from live NBA and NFL games, all the way to short form, digitally native content. It seems to be what the consumer is looking for and in an environment that they want to consume it on the go and wherever they are.
FierceOnlineVideo: The worry a few years ago was whether online video would supplant television or younger audiences would reject television. Do you see that happening or do people still use TV as the primary source for video?
Ackerman: It's TV redefined, right? Millennials are probably pushing it further than other generations, but it's still the TV content that they want. They're just taking it on the road with them and they want to watch it in different places and at different times. I think from the core of traditional pay-TV services -- the rise in VOD, the rise in time shifting -- is a good indicator of people's desire to have the content when they want. You look at the content that's really driving viewership in mobile and on these other devices, it's still quality, premium long-form content that I think we traditionally define as television, it's just packaged up and consumed in different places in different ways.
TV is absolutely here to stay. The programmers, the creators of television content are not going anywhere; they just have more distribution points to deliver that content to consumers. Whether it's through non-ad supported like Netflix, or ad-supported like AOL's distribution or Hulu or even the apps that all the networks create and distribute across different devices, the core of the content is not changed drastically; it's just where consumers are viewing that content is probably the biggest shift.
FierceOnlineVideo: AOL's real focus right now is looking at how consumers are watching. How are advertisers changing to meet viewing behavior?
Ackerman: Our customers today both on the buy and the sell side -- you know, the large agency holding companies and then on the sell side, the largest publishers and now many of the programmers who are again the largest publishers of quality video -- the conversation centers around how data can be activated and specifically, person-level data, whether it be CRM data, or cookie data or device ID data that advertisers are capturing from all those touch points that they have with consumers, in their stores, on their apps, on their websites. How can they package that up in a unified fashion so they can use it to define what their target audience is, and how they deliver advertising to those audiences in mobile, on desktop, on traditional TV and then through OTT or connected TV devices where consumers are viewing that content? That's a big challenge. That's really tough to have that data applied across all those screens.
So that's really where they're looking at AOL and other tech platform providers to help normalize that for them, so they can manage simple things like reach and frequency across different screens. And then be able to capture the value of that on the back end. That's where the rise of multi-touch attribution has really become core to any marketer or any agency's operation because all the investment in data and technology to help understand the audience and deliver the right ads for them, you need to be able to understand the value and activate those insights on future campaigns. And multi-touch attribution really helps to capture how media is performing and how consumers are delivering value back to the advertiser across all those platforms.
That's permeated every conversation that we've had (with) our partners on the buy and sell sides, and how they're formulating their upfront strategy, and how they want these screens to operate together in the '16-'17 upfront.
FierceOnlineVideo: Do you see the value of audience measurement continuing to grow in importance over the next several years? How will that translate into growth for programmatic advertising?
Ackerman: The more the focus shifts to impact, what the media is delivering --how each medium is complementing each other, and how television is driving results in digital and search to consumers, it definitely raises the bar for what you need to do and the depth of the data that you're using.
In the conversation about Nielsen and comScore and battling it out for what the currency for cross screen video is going to be, it feels like there's also in parallel a mission on the programmer and advertiser side to move away from reliance on that simplified currency and really get down to data that's most relevant to that specific advertiser for that specific campaign.
You see it with all the networks: Viacom with their Vantage program and the relationship they've struck with American Express. Turner has been leading the charge for the past couple of years with their Ignite and their very different targeting and measurement platforms. Same thing with NBCU, and now all of the other network groups --Discovery, Fox -- they're all following suit because they're discovering that their conversation with the advertiser and the value of their inventory can be significantly greater if the data that's being used on a campaign-by-campaign basis is really very relevant to that advertiser and less about the more blunt age and gender demographics that have really driven the upfronts and frankly the newfronts now and the scatter market for years.
So I think each subsequent upfront that we see over the next couple of years, there'll be more and more dialogue around guarantees on other audience data in parallel and I think (advertisers will be) starting to swap out traditional age demographics.
FierceOnlineVideo: eMarketer recently forecast about $7.34 billion will be spent on advertising this year including mobile, but that will slow down by 2020. Does AOL see a similar trend?
Ackerman: One of the limiters of growth on any screen is the availability of quality inventory. That's a bigger trend you see in the newfronts and the upfronts -- the content that was traditionally developed for television is being pushed to other screens and then being packaged up into smaller, stackable bite-size forms for viewership. Things like Saturday Night Live or Jimmy Fallon, that kind of programming that is long-form on television … I think the rise in investment in more of that kind of quality content will really help continue growth in mobile video, mobile display, and all of the ad opportunities around mobile where consumers are viewing that content.
There are some things to be figured out around measurement and standardization on mobile, but I don't see there being a cap on growth there. …Based on consumer behavior (the smartphone) is almost another extension of the human body. People are spending more and more time on it. So it's hard to look at a cap on growth in the foreseeable future.
As that distribution grows, more content being distributed, and the carriers continue to deliver better connectivity and faster speeds, it's hard to say that growth is going to slow.
FierceOnlineVideo: Beyond measurement, what challenges has AOL seen in the programmatic environment? What would you recommend that brands and programmers watch out for when monetizing their content?
Ackerman: I think it goes back to content development and distribution. There's so much demand from the content creator side, it's constantly being pushed to speed up and develop more and more quality content to meet the demands of advertisers. … The notion of content and context along with data is really the focus in the programmatic space. That need for big-scale quality content is becoming more and more important, as the content and context becomes almost as important as the data in those programmatic decisions. So the market needs to meet the demand there.
AOL and other platforms have focused a lot on making sure the data inputs that are going into programmatic decisions are really quality audience data, great protection against (fraud), making sure it's actually human beings that are consuming the content, and then connecting it to the right inventory sources. So those programmatic transactions include really good quality inventory on the back end.
There's good opportunity there. More original content is being developed by both digital companies and by traditional programmers, so hopefully there will be enough to meet that programmatic demand.
FierceOnlineVideo: Verizon's go90 launched last year, and AOL is playing a big role in getting advertising onto that platform. How have you supported the service, and how has the response been?
Ackerman: In general we are trying to expand the scale of addressable video audiences and addressable either at the household level, at the device level, and ultimately at the person level -- in an anonymized privacy compliant fashion. Go90 is another extension of an addressable audience. High quality TV and the best of digital content in a mobile environment where consumers are demanding that that content be available. But it is part of a portfolio -- the addressable audiences that we touch on AOL owned and operated properties and then on our publisher partner properties on all of our properties ... and even in the television space.
That's the importance to the advertiser, that you have a scaled, addressable audience. Go90 is definitely part of the portfolio, but it is (just one) part of that portfolio. … Advertisers have been very pleased with that being just another extension of an addressable video audience delivered by Verizon and AOL.
FierceOnlineVideo: How much of a role does content play in attracting consumers to go90 as opposed to competitors like Binge On and AT&T's planned service?
Ackerman: There's an enormous amount of competition but that speaks to the market opportunity. Just like any environment, subscriptions grow on Netflix, on Hulu, on Amazon, and I think you'll see the same thing play out here because it's the content. The consumer experience of discovery is incredibly important; it's all about finding the content that people care about. It plays a huge role in that. If you get a consumer in and they find a lackluster experience of finding content that's relevant to them, you're not going to keep them around. I think Go90's done an amazing job of providing the kind of content that people want from sports to entertainment that keeps them coming back and hopefully keeps driving adoption on Verizon and hopefully on other carriers in the mobile ecosystem.