WarnerMedia plans to implement addressable TV in Chile and Mexico this year

Pablo Greco, Ad Sales Director at WarnerMedia Chile, reported that the company plans to implement addressable TV in Chile and Mexico this year, in addition to a third market, with which they have negotiations under way. His statements took place during the  ‘Addressable TV for pay TV operators’ panel, as part of the first Nextv Ad Latin America’s virtual edition. The panel was starred by Greco, together with Chris Pizzurro, SVP, Global Sales & Marketing at Canoe Ventures ; Juan Sergio Valcarcel, Marketing and Innovation Director at Diageo Mexico; Mario D’Andrea, President at the Associação Brasileira das Agências de Publicidade; and Hector Pita, Head of Addressable Sales Product at Totalplay.

Regarding the concept of addressable advertising and its advantages for operators, advertisers and agencies, Pita reported that ‘TV has transformed itself in recent years, and Totalplay was born in that transformation, with the necessary technological infrastructure to implement addressable TV. It is about including segmented advertising on TV’. Later, the executive said that three key elements are needed for its operation: firstly, it requires ‘a technological infrastructure that allows us to send an advertisement to a STB or a personalized device, so that we know who is behind the platform on which these advertisements are displayed’. Second, it is necessary to ‘have segmented audiences’, while the third element consists of ‘a platform to manage these campaigns’. In the case of Totalplay, the executive assured that they use the Google Ad Manager platform. “We were the first in the world to use Google to do segmented advertising on TV’. Regarding the advantages of addressable advertising, Pita said that they are focused on being able to ‘combine the best of TV with the digital world’. This way, he reported that advertisers and agencies ‘can personalize their campaigns aimed at a key audience; use different stuff for each of these audiences; reduce wasted investments for a particular audience; receive reports in real time, which did not happen before; place ads more relevant than others for each audience; increase efficiency and precision for all campaigns’, and others.

Regarding his vision on how pay TV operators in Latin America are facing the development of addressable TV, Greco said that ‘due to the connection we have with the different markets, we look a lot at the development of addressable TV and other ad solutions that have been implemented, and we try to replicate those experiences in each of the markets, in Latin America, and also in each particular market’. Later, the executive assured that ‘taking into account the experiences that have been taking place in more mature markets in terms of addressable TV, such as the US, we are looking at the possibility of being able to implement it. Not only addressable TV, but other ad solutions that we have already developed and implemented. We are very advanced to be able to implement addressable TV this year in two or three markets in Latin America. Chile and Mexico will be the two main markets, and there is a third with which we are near to define some suppliers’, said the executive.

Regarding the discussion on addressable advertising in Brazil, D’Andrea reported that the issue ‘is just beginning’. This way, the executive said that ‘the main problem is technological. STBs here do not have the same configurations that we have in other markets, and large groups and TV companies, with this technological issue, are building their own formats. In Brazil, for example, Warner is starting with its audience targeting, based on its own data platform. We also have Globoplay, which grew much more than expected during the pandemic, but it is a different and more diverse model, because it brings together on demand, as well as FTA and pay TV, all together. There is still a lot to grow. The addressable TV model has a lot of space here. We have to overcome the technological hurdle’, he completed.

‘Addressable TV is the dream of any marketer’, said Valcarcel. ‘It is about being able to send the right message, at the right time, to create the right reaction’. The executive also reported that from Diageo ‘we have done small trials with Totalplay, because we must learn. Up to now, we have implemented a small campaign, but we are taking that step. Later, we will delve into addressable TV strategies. It will depend on how skilled we are with our partners to make relevant content. It is a great challenge, and we are starting’, he said.

Regarding the ecosystem of partnerships with different operators and pay TV channels linked to addressable advertising in the US, Pizzurro reported that ‘we are fairly advanced in the US in terms of addressable TV, across AVOD and linear. In the Canoe footprint in the US, we have pay TV operators hearing for a set of standards, so those operators individually monetize their investments, but also, that same investments can be leveraged to work at scale for the pay TV channels. Specifically, across Comcast, Cox, Charter Communications and Frontiers pay TV distributors, they all monetize their addressable technology stocks, but they also offer the technology capability to the pay TV channels, including companies like WarnerMedia, NBC, Discovery, and others, to use their technology on the channel’s inventory. The advantage for the pay TV operators is that they now have two ways to monetize the VOD and linear addressable technology investment they made: one for their own purposes, and also for the channels to leverage’.

‘Since the 1960s in the US there are two minutes for local advertising. This format was taken over by Mexico with the pay TV boom in the late 90s. At Totalplay, we already have 60 channels, and we are working to increase those two minutes’, reported Pita. Also, according to Greco, ‘cable operators have different types of agreements with programmers. In some markets, it has been possible to re-buy those minutes, or for the programmer to take control of 100% of the inventory it has. But it is not something that has been done in all markets. Minutes available from the operator do not limit the addressable business. At WarnerMedia we are in talks with several operators to find a way for the programmer to make the screen available and for the operator to guarantee the technology to be able to make addressable TV. The situation changes according to each market, and Mexico and Chile are more advanced in terms of this technology, but commercial agreements can be entered into with operators for the development of addressable TV in each of the markets ”, he completed.

According to Pita, ‘when Totalplay launched addressable TV, we started with about 600 thousand STBs, and today we already have more than 3 million, and we have decided to offer our inventory in addressable at 100%’, he added.

‘For a market with restrictions in Latin America, such as beer and alcohol, there is a very important player, which are the governments’, said Valcarcel. ‘We broadcast advertising after 9:00 PM or 10:00 PM because we want at least 70% of the audiences in those programs to be adults’, he said. When talking about how they establish that their advertisements reach only those audiences in the addressable model, the executive said that ‘there we have another big challenge, because what we have to guarantee is that we are reaching the correct adult audience. Operators and content owners should help us in that conversation because, if we guarantee that we are reaching the right audience, we could launch advertisements before that time. But always having that guarantee, because we do not want to run the risk of reaching the wrong target ‘.

In the same way, when focusing on the personal data protection regulations in Brazil, D’Andrea stated that in that country ‘the regulation is very strict. As an agency and advertisers, we must understand that we have to have a clear vision of consumers for the use of each data. That is the basis of the system. The first thing advertisers and agencies need to ask themselves is what data they need, and what they need it for. Something that I always like to point out is that, over time, the data can become a commodity. With all the technology we have and all the companies that work on this issue, in a while we will all be able to offer impressive data on everything. The key point will focus on what we will do with this. Data predicts repeating habits. Those of us who work in advertising and communication must often create new habits. Therefore, having the data is not enough to guarantee that we can achieve everything. The regulation is strict, but we must delve a little deeper into all the decisions we make’.

From Greco’s point of view, ‘the media is facing a permanent transformation and a consolidation of different groups’. Likewise, the executive said that, beyond the recently announced merger between WarnerMedia and Discovery, ‘we see many mergers on different scales, and, in what has to do strictly with the ad-sales business, we have taken over DirecTV’s ad-sales business in some markets, as a result of which we are part of the AT&T Group, and we see that this type of situation can continue to happen in different markets, either with DirecTV or with different players, because we see the need to continue to consolidate and gain scale in order to deliver a more convenient advertising solution for advertisers, media agencies and the entire advertising ecosystem’. Later, Greco added that ‘this will continue to happen, and it will even be possible to work together with the ad-sales teams of the different cable operators, and we will be able to integrate the different experiences that each one of us is having, as well as we will be able to create synergies in the different customer contacts we have. There are too many models, and from WarnerMedia we are working on them’, he ended.