Is Programmatic Poised to Transform Terrestrial Radio? - eMarketer

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Is Programmatic Poised to Transform Terrestrial Radio?

August 7, 2015

Jeff Haley
President and CEO

As president and CEO of Marketron, a business software provider servicing radio broadcasters, Jeff Haley oversees all developments designed to help broadcasters drive ad sales and revenues. Haley recently spoke with eMarketer’s Lauren Fisher about bringing programmatic to terrestrial radio and shared his expectations for doing so with regard to audience-driven data and real-time delivery.

eMarketer: Can you tell me a little bit about Marketron?

Jeff Haley: We are a technology company that was founded in 1959 to serve local broadcasts to both TV and radio. At this point, we’re primarily a radio broadcast provider of software technology. Most of it is cloud-based, and about 65% of all US commercial radio stations use our software.

With the scale of 6,500 radio stations, we have the ability to act as a linchpin in the transition to programmatic for radio. We’ve partnered with two technology companies to build out a supply-side platform (SSP) to give inventory owners the tools to make a marketplace for programmatic.

eMarketer: With regard to the nature of these transactions, are they all guarantees? Is there any real-time bidding (RTB) going on?

Haley: There isn’t any RTB. The potential for RTB in the radio space is only inasmuch as there’s enough velocity to manage it. Down the line, there might be an opportunity to do it if there’s a robust marketplace.

“By this time next year there will be multiple broadcasters trading inventory programmatically on a spot basis.”

The other consequence of RTB is with real-time ad serving, where you have to move the media around and drive the playback of that ad. It can be done, and it is possible. For example, iHeartMedia has done a test and had an ad air within 15 minutes of an order. But it’s still early days.

eMarketer: What do you anticipate to see with programmatic radio in terms of targeting?

Haley: The use of data in the digital space is self-validating because you can take an algorithm, apply it to the inventory that you’re trying to buy or the characteristics of that set of IP addresses you’re targeting and essentially test it to see if you were getting better performance out of that data.

In essence, that provides a feedback loop on ad performance. But the feedback loop in traditional media is generally a sales matchup that has a lifecycle that’s longer than an overnight basis. I’m cautious as to the value of this aggregated third-party data because it’s still difficult to get that feedback here.

eMarketer: How quickly will programmatic take hold in the radio space?

Haley: By this time next year there will be multiple broadcasters trading inventory programmatically on a spot basis. What volume will they be trading? I don’t know yet. There’s certainly interest on the buy side and an air of inevitability about programmatic from the broadcaster side.

When all of this can be done on an exchange, in a seamless, transparent way, that changes the dynamics. It can help us to see real acceleration across many markets and outlets.

But you’re going to need to take a percentage of their premium inventory as well as a percentage of the subpremium to put programmatic into effect. It won’t be a successful marketplace if it’s just remnant-type stuff. If you’re going to open up a platform to buy deeper markets and deeper into each market, you have to create some competition for the buy side. It needs to have a happy medium.

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