Gain All The Reach Extension Benefits, Without The Red Flags
One of the enduring questions advertisers have as they navigate the streaming television market is how to reach audiences across a splintered landscape.
After all, when streaming TV started to gain traction, many consumers cut the cord and embraced the endless entertainment of both subscription and ad-supported streaming. But the result scattered audiences into multiple services, formats, and platforms.
The need to address this fragmentation gave birth to TV reach extension businesses. At first, broadcasters offered reach extension as a way to make up for decreasing viewership on linear. Reach extension allowed them to offer advertisers access to more markets, and in turn more audiences — particularly the cord-cutters who already jumped ship — by packaging third-party streaming inventory into their existing owned linear offerings.
Now, as streaming is destined to overtake pay TV as the predominant viewing format, we’re entering a new era of reach extension. This time, it’s also due to that “endless entertainment” idea that originally attracted consumers in the first place.
Since those early days of streaming dominated by Netflix and Hulu, thousands of apps have launched including broadcast staples like Peacock and Tubi, as well as longtail experiences catered to niche interests. While this growth has enhanced the overall streaming experience, it has also fragmented viewership even further, causing stakeholders to once again turn to the benefits of reach extension.
It’s a powerful strategy, which is why VIZIO augments our native on-platform ad inventory with a reach extension option called VIZIO Audience Connect.
The Benefits
At a topline, reach extension provides media companies the ability to scale ad buys beyond owned properties, whether you’re a massive walled garden like YouTube and Netflix, or an up-and-coming TV app trying to grow revenue. On the buy side, it allows brands and agencies to reach viewers as efficiently as possible, by extending premium partner reach to additional platforms at lower CPMs without the need to strike additional ad buy agreements with multiple providers.
Done right, it’s a win-win for everyone: advertisers and content owners. In a fragmented streaming TV world, taking advantage of reach extension opportunities is essential. Given the vast number of platforms, services, and ad networks serving them all, leveraging an opportunity to buy once and appear anywhere is the key to achieving scale in today’s landscape.
But it’s not always an absolute win-win. While it’s great for content owners and apps, in that it allows them to give access to scale beyond the limited audience they can offer alone, there are many valid questions and concerns about its benefit to advertisers.
The Red Flags
Unfortunately, the way that some companies offer reach extension has damaged its reputation as a valid advertising strategy. It comes down to transparency and value (or the lack of it).
For example, some companies hide their reach extension capabilities under the guise of their CTV inventory. In other words, advertisers buying those reach extension products don’t always realize the inventory they’re buying doesn’t appear on the platform of the company they’re buying it from.
Other companies purely arbitrage inventory. When they have an ad budget, they go buy inventory on behalf of the advertiser through the same outlets (e.g., programmatic exchanges) at the same priority in the waterfall (e.g., remnant unsold inventory) the advertiser already has access to, but at a markup in order to make a margin for the pub.
As a result of these tactics, some ad inventory marketplaces approach reach extension activity with a great deal of caution and restraint. They want to know that you have legitimately procured the inventory rights offered, not just buying remnant inventory randomly and marking it up without detailing what’s being sold. They also want to know if you have priority access to inventory and premium ad placements at a favorable rate.
It’s an understandable position. The integrity of an ad inventory marketplace depends on buyers procuring inventory directly from media owners. Anyone identified as a middleman, such as companies offering reach extension, is met with a great deal of scrutiny.
This scrutiny is based on how digital ads are bought and sold through mobile apps or online, where the need for a middleman is less common. But in the TV world, things are different.
There are all sorts of carriage agreements and inventory rights over spots that are regularly handled through well-established arrangements. After all, if you’re watching the NFL on ESPN, you know ESPN is selling some of those ads. But the MVPD is selling some of the ads as well so they get a share of the inventory.
This same dynamic has carried over to the digital/streaming space, and for the same reason. At the end of the day, it’s still TV. These carriage rights make sense in the world of streaming because there is more ad demand in the streaming environment than there are quality placements. This makes ownership and sales rights over the quality placements more valuable. In order to secure these rights as the seller, you have to add value back to the media owner in some form.
For example, you may give the media owner benefits on your platform in exchange for some sales rights to inventory off of your platform. Or you may be acting as an extension of the media owner's sales team in order to help them fulfill enough demand to eliminate slates in their ad pods. But there has to be a value exchange to secure the rights.
The Solution
It’s fairly easy to gain all the benefits of reach extension while avoiding the red flags discussed.
Hold partners to a high standard of transparency. If you’re negotiating ad buy agreements directly with a platform offering you ad inventory, be sure to ask for specific details on where that inventory resides and what unique sales rights the platform has in representing that inventory.
Ensure the legitimacy of sales rights. The best reach extension programs are those that provide value back to their partners, rather than just acting as opportunistic resellers.
Work with trusted partners, such as ad inventory marketplaces with strict rules for how inventory is bought and sold to ensure no one is offering reach extension inventory as native placements.
With these steps in mind, you can leverage all the benefits of reach extension without falling prey to unclear offers or bait-and-switch tactics.
All three are core values here at VIZIO. Reach extension is a natural complement to our native ad inventory, and that integration allows us to more fully realize the benefits that reach extension can offer when integrated into a broader advertising strategy.
For starters, we have the ability to extend our own first-party data into reach extension environments through our glass-level ACR data from Inscape. Because many households own CTV devices from more than one manufacturer, leveraging a common data set between them amplifies the impact of reach extension efforts.
What’s more, VIZIO is able to secure premium placement with favorable rates in many of our reach extension partners’ ad waterfalls because we add value to their businesses in many ways. Perhaps chief among them is the ability to distribute and promote their content on VIZIO TVs, which is essential to any content owner, and allows them to reinvest more heavily in content creation.
Finally, VIZIO aggregates transparent, high-quality inventory from legitimate sources and from enough sources to achieve true scale across CTV audiences. In other words, we do the work to aggregate large audiences across high-quality inventory on the advertiser’s behalf.
