Cablevision works towards automation for programmatic linear TV

Cablevision Media Sales and its parent company Cablevision Systems Corporation are leading the way into the programmatic era for linear TV advertising. The company is delivering improved campaign performance and ROI for national brand advertisers through a combination of census-based data (using de-identified STB tuning data), data-driven audience buying (as opposed to buying spots based on channel and context), real-time campaign optimisation (including frequency capping at a household level) and addressable, impression based buys using CPM (cost per thousand) rather than GRP (Gross Ratings Points) as the currency. 

As Ben Tatta, President of Cablevision Media Sales, points out, the advertising is managed and measured on what is effectively a programmatic basis. Further sell-side automation and API-based integrations with buy-side platforms is the next step to deliver an automated end-to-end trading process.

Cablevision Systems Corporation is one of the leading cable operators in the U.S., serving nearly three million homes in the New York DMA (designated market area). Like all cable operators in the U.S., Cablevision is handed a share of the linear avails on commercial networks that it carries and this is the inventory that is being sold on a targeted and CPM basis. What Tatta calls “manual programmatic” campaigns (minus the end-to-end automation) have been running on the cable platform for the last year with notable success.  

Tatta points out that data-driven advertising and impression-based sales are fundamental building blocks for programmatic trading. “We are leveraging the census-level data and using technology to automate the process of audience-based buys for TV. We are already running a good volume of business programmatically,” he confirms. 

The next steps, in terms of technology, are enhancements to inventory management systems and a migration towards more electronic ordering processes, which raises some very practical considerations like whether you need electronic signatures for every deal or have an umbrella sign-off for multiple trades. The integrations with the buy-side platforms are considered straightforward, technically. The main challenge is to define the business structure and retail rules for buying inventory direct through a buy-side platform. “We see this taking shape as more of a private exchange model with agencies versus the open exchange model associated with online media,” Tatta reveals.

Cablevision Media Sales is working towards a trial of end-to-end automated programmatic trading (for linear inventory) and following a trial period would prepare for a commercial introduction of programmatic TV advertising.

Tatta is excited by what full programmatic trading could mean for linear television, suggesting it will be more effective than in the digital domain. “I look at television programmatic in a different light than digital programmatic because the supply and demand is inverted,” he explains. “We have excess demand because there is finite linear inventory, whereas for digital there is excess supply. Additional demand for linear inventory will do good things for pricing.”

Historically, the inventory handed to cable operators by the networks (broadcasters) has been sold to local and regional advertisers, with the operators exploiting their ability to segment their networks geographically. One of the fundamental changes now underway in New York is that operator inventory is being sold to national brand advertisers, too. Brands and their agencies are using their own first-party consumer data to identify target audiences – audiences that can be discovered by Cablevision using its aggregated, de-identified audience tuning data and third-party data to blind-match these targets with actual tuning households. 

Cablevision has a clear understanding of audience tuning activity thanks to the set-top box audience tuning data reporting that comes back from 98% of its boxes. This census-level data also means that no audience is too small to understand. As a result, viewers watching off-peak shows on larger channels or niche commercial channels in numbers that are too small to register with traditional audience panel measurement are being recognized and counted. 

This makes it possible to aggregate meaningful advertiser target audiences even if you are looking for demographic or lifestyle sub-segments of the population. These audiences are being gathered up from across multiple channels and the advertisers are now buying audiences from Cablevision Media Sales rather than buying day-parts or shows on any given channels in the expectation that they will find the right kind of viewers there. 

This census-level tuning data (and you can read more about it here) is one of the foundation technologies for programmatic trading of linear TV. Tatta estimates that a large percentage of impressions on the Cablevision platform are not effectively measured using conventional sample-based reporting methods.  As a result, advertisers are unable to maximize their reach across target households. Using census-level audience data, advertisers can uncover where their audiences are, regardless of how large or small those audiences and/or audience segments are.

The set-top boxes enable impression-based measurement because they know whether a household was tuned to a channel when an advertisement was served. Advertisers can use the audience tuning data to measure ad engagement levels across the target households. It should be noted that all this information is aggregated and de-identified to protect viewer privacy.

Cablevision has rich sources of data to help advertisers find their target audiences. Cablevision can enrich its data with an array of attributes that an advertiser can choose from, going way beyond age and gender to  households that rent, tech savvy households, households with pets and so on. Advertisers can introduce their own customer information to the process of building target audiences. “We are now defining audiences in our customer’s terms, which means an automotive manufacturer can use its own customer data to message existing SUV owning households instead of those interested in sports cars, and insurance companies can target separate audiences for renters and home owners,” Tatta points out.

Not only is every impression on the Cablevision network identified (via STB tuning) but it is also authenticated, in terms of the viewer segment. In the online world the audience attributes are inferred by cookies. “There is no need to decipher cookies,” Tatta points out.

The CPM-based trading of inventory, already familiar to digital buyers, is another key building block on the road to programmatic linear TV. “When you talk about the concept of buying audiences, it is critical that we can express our inventory in terms of target impressions. This means advertisers can buy more efficiently without paying for waste. That makes it easier for advertisers to justify their return on investment in television advertising,” he says.

The Cablevision Media Sales approach is well suited to optimising campaigns in real-time. Apart from real-time pacing (adjusting the flow at which ads are served over a period of time) and the fact that you can run a campaign until you hit an impressions target, you can frequency cap at a household level. 

“This is one of the most powerful optimisations you can use,” says Tatta. “It is incredible what efficiencies can be gained just by limiting advertising saturation.” He points out that when you talk about a frequency figure of six, for example, this means that on average the ad was seen six times per home. But that hides the fact that a heavy TV viewing home could have seen it 20 times and a light TV home only saw it twice. Using census-level audience data and addressable advertising, Cablevision advertiser clients can deliver the exact ad the exact number of times to each and every household it is trying to reach, virtually eliminating the waste associated with conventional linear TV advertising.

Cablevision, like other U.S. cable operators, has a unique opportunity to innovate in ad tech because it is given ownership of a share of the avails on commercial networks. In Europe, this opportunity is only possible where a platform operator also owns channels. To apply new concepts like addressable advertising on other channels requires cooperation with broadcasters. But there is growing interest in Europe in how such practices can be adopted and the partnership ecosystems needed to sustain them.

Cablevision is certainly an ad tech pioneer. With its census-level measurement, impression-based reporting and sales, data-driven audience targeting and aggregation (including against hundreds of audience attributes) and its real-time optimization, Cablevision Media Sales is well down the road towards ‘programmatic’ trading of linear television. What this cable operator and its sales division are doing in New York is revolutionary and it is significant for the whole TV advertising market. 

Learn more: ‘Cracking the code on programmatic TV’

Want to learn more? Ben Tatta, President of Cablevision Media Sales, will be at Future TV Advertising Forum (London, December 2-3) when he will be talking about ‘Cracking the code on programmatic TV: A Practical approach’. He will outline what has been achieved with programmatic campaigns so far, look at the details of planning, buying and optimizing campaigns using CPM, weigh up monthly campaign reporting versus real-time optimisation, and outline how automation will bring programmatic to scale and make more money for television networks (broadcasters) and operators. Find out more about the conference here. You can download the full conference agenda here.