1. Ad Agencies Join Project OAR

Addressable advertising may be moving yet another step closer to real as all of the major ad agency groups: Publicis, Omnicom, GroupM, Magna, Dentsu, Havas and Horizon Media all agreed to participate in Project OAR, the consortium designed to create standards and processes for addressable TV advertising.

Why It Matters

Project OAR, to refresh your memory, is being skippered (see what we did there) by Inscape, VIZIO’s wholly-owned ACR data collecting subsidiary.

On one level, OAR is a simple ad tech play, a way for Inscape to use its technology to overlay addressable commercials on the inventory that is currently playing on the 11 million opted-in connected smart TVs in its ecosystem.

But on another level, it is a way to create the actual standards and processes that the industry is going to need if it's serious about making addressable TV advertising happen.

That’s why it’s such a huge win for Project OAR that the consortium has members from all the relevant parties in the addressable ecosystem: networks (Fox, the lone holdout among the major networks recently joined up too), ad-serving platforms like Freewheel and Xandr, and, now, all of the major ad agency groups.

What this group now needs to do is figure out how addressable TV advertising actually works. Among the questions they'll need to answer are:

• What do the planning and buying processes look like when they're done across multiple networks?
• How will linear addressable differ from VOD addressable?
• How do you standardize segments across all networks and platforms?
• How do you serve targeted ads when TV viewing is largely household-based?
• How do you determine addressable CPMs?
• How do you measure addressable advertising?
• When do you sell the inventory (during the upfronts? As scatter?) 
• How do you sell off unsold inventory?
• How do you move beyond Inscape’s inventory?
• How do you bring other key players (Nielsen, for example) on board in a way that makes everyone happy?

That’s not something that’s going to happen overnight, but given how rapidly the industry is changing, and how much more addressable-ready OTT inventory is on the way, it may happen a lot faster than many players were expecting.

What You Need To Do About It

If you’re not already a part of Project OAR and your company is one that probably should be, it's time to join up.

You want your voice to be part of what’s looking like the TV Ad Industrial Complex consensus, and you’ll want to make sure you’re a key part of this brave new world. Measurement companies. MVPDs-that-already-have-addressable-ad-businesses and brands in particular, should come forward and get a seat at the table.

If you’re an ad tech company, an SSP or DSP in particular, you should watch what’s happening and figure out how you can be a part of it.

If you’re a brand advertiser, you’ll want to learn more about addressable in general and start to figure out when, and if, it’s right for you. (Pro Tip: Remember that your ads serve different purposes, that TV is often about branding, not direct response, and use that insight to form your plans accordingly.)

2. AT&T To Make DirecTV Now Part Of WarnerFlix

AT&T's WarnerFlix product often seems like an afterthought.

Ss we’ve previously noted, it seems like they figured out all the business reasons why the Warner purchase was a great idea— 5G! Xandr! All That Data!—but left the “why would anyone want to pay cash money to watch this thing and what does it actually look like” part until later.

Well it’s later right now, and after putting the kibosh on a cringeworthy telco-esque three tier plan, AT&T now seems to have a new plan in place: integrate it’s flailing DirecTV Now vMVPD service with the upcoming WarnerFlix to create an all-in-one offering.

Why It Matters

The Great Rebundling is upon us. 

AT&T’s plan puts it up against Hulu, whose well-designed, easy to use—name two things DirecTV Now is not—platform already contains both a sizable SVOD service and a linear TV component. (It’s also likely going to be offered in conjunction with Disney+ and ESPN+., but let’s cross that bridge when we come to it.)

Now TBH, adding DirecTV Now in with WarnerFlix seems more like a move to save a rapidly failing asset than a carefully thought out plan, but let’s assume that AT&T will be wise enough to hire a really good UX team to bring DirecTV Now up to snuff, and the resulting product looks sort of decent.

In that case, it’s a credible offering, especially when combined with WarnerFlix, which will include HBO-On-Steroids and will likely be able to offer CNN, TNT and TBS for free.

It also solves AT&T pricing problem: if HBO via an MVPD is already $15/month, how do you add a whole bunch of extras to it (more HBO, Cinemax and all those Warner Brothers TV shows (e.g. Friends) and movies) and not come up with a price tag that scares people away?

Add in a linear pay TV option, that’s how.

Whatever AT&T winds up charging for it (and please, for the love of all that is holy, do not, under any circumstances even remotely consider a yet another three-tier plan for this) it’s going to seem less than onerous, given all you'll be getting.

Now AT&T may still need to come in at a price where they’re losing money on every subscriber, but that’s not the end of the world, given how much money all the other Flixes are going to be losing too.

Right now, it's all about obtaining and retaining subscribers and profitability is just collateral damage.

Or at least that's what they keep telling us.

What You Need To Do About It

If you’re a rival Flix, think about what your linear TV strategy is. Does it make sense to pair with an existing vMVPD the way Verizon is doing with YouTube TV? Should you start your own linear TV service? 

The answer will depend on what kind of deals you can cut and what you think of the future of cable TV, and if the answer to that last question is “not much” then maybe you just add in the local broadcasters via a low-cost vMVPD.

If you’re a consumer, high five! Competition is going up, prices are going down, and your wallet is likely going to come out a winner.