Why iSpot is Confident that AI Will Revolutionize TV Ads - Eventually
The currency wars were "much ado about nothing"
There is a lot of excitement surrounding how artificial intelligence is already reshaping how media spending gets optimized - thanks to AI products from tech giants like Meta and Google.
There are also lots of reasons why this may never happen in TV advertising (fragmentation, tech challenges, fear, inertia).
Sean Muller, founder and CEO of iSpot, believes all of this will be overcome - and that machine-driven optimization will vastly improve the relevancy, performance and accountability of TV advertising.
It’s just going to take a little time.
As part of my Next in TV special series, sponsored by Vizio, I had Muller on this week’s podcast, where he touched on the state of TV attribution, the currency wars, and a range of other topics. I asked him whether TV’s fiefdoms will prevent the industry from truly letting AI rip.
After all, are all the big TV guys putting up their own walled gardens, unique IDs, audience graphs, etc. - making it hard for machines or algorithms to work across channels?
“They’re not making it harder,” Muller said, noting that iSpot has partnerships with all the major TV networks and DSPs. “What the advertisers want is not those publishers to do the measurement for them, but they want a neutral party like iSpot to do it exactly in the same methodology. So they can do an apples-to apples-comparison between an Amazon Prime and an NBC or a Disney or Netflix.”
“Really where this is all heading is having the publishers actually take action and actually optimize based on outcomes,” Muller added. “That’s where the paradigm shift is really going to happen. It’s actually not about the measurement of outcomes. It’s about the decisioning based on outcomes.”
Yeah, but that would require various big TV companies to presumably open up their ad inventory to some level of optimization that would be outside of their control? What if AI shows that X ad spots are driving more outcomes on Tubi shows, instead of Paramount+ shows, and starts moving dollars around (despite whatever upfront deals have been negotiated)? Won’t that screw up pricing, inventory management, control?
“We’re absolutely going there, but there’s a particular path to get there. And I think sometimes people put the cart before the horse.”
“A lot of marketers are like, well, I’m not trusting the response that I’m getting from the AI. Trust is number one. And how do you get trust? You’ve got to train the AI on data that’s already trusted by the industry. Then optimizing the media, not just within a publisher, but across publishers.”
Even the big guys? Muller said that even Google - the ultimate walled garden - is on board. “They’re actually very leaned into this because it’s actually a benefit to the publishers that are good at performance optimization… and actually publishers like YouTube has amazing data, amazing ability to optimize.”
It should be fascinating to see how the TV world - which happens to be going through a massive transition - responds, or doesn’t, to this desire.
In the meantime, here are a few more highlights from our conversation:
On the currency wars - which dominated the TV ad conversation just a few Cannes ago:
“The truth of the matter, the brands never brought up alternative currency ever, just to be clear. That wasn’t a thing. Throughout the whole alternative currency conversation, they’re thinking about outcomes and performance. And so the alternative currency was really the publishers and the networks primarily trying to gain maybe some leverage.”
On whether there’s ever going to be ‘one way’ to measure outcomes:
“It’s actually fairly consistent across brands. Most everybody has adopted a multi-touch attribution crediting system that looks at conversion rate is one unit of measurement. And then the other one is lift or incrementality. And you kind of have to use those together.”
On whether iSpot is seeing lots of new brands coming to TV advertising:
“That is definitely happening. I’ll caveat that though. TV is largely driven by sports and really a handful of industries where most of the spend really sits….I’ll tell you like the five biggest spenders and industries right now, year to date. You’ve got insurance, you’ve got auto, quick serve restaurants, wireless and pharma. Like that makes up like 30 % of 35%, maybe more of all advertising. Now I’ll tell you the one platform that’s probably done the best job in bringing more advertisers to TV and that’s YouTube. “