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29 November 2018

Google debunks TV mistrust with Disney, booting out Freewheel

In a statement of Disney’s intentions to rival the major traditional TV service providers, the company has dropped its advertising contract with Comcast’s Freewheel and opted instead for Google Ad Manager. An intriguing part of the news was revealed by the CTO of Disney’s Direct to Consumer and International unit, Aaron LaBerge, admitting that an in-house ad tech project was a major consideration. So what swayed the decision – money, complexity, inexperience, or none of the following?

Given the trend of major US companies, operators in particular, buying into the ad tech business, Disney following suit would not have been a huge surprise. LaBerge explained, “It was better for us to explore a partnership than trying to reinvent the wheel at the scale we are talking about.”

A global inventory of Disney’s scale – poised to go OTT with Disney+ next year – is a daunting task indeed, yet the promotion of Google over Freewheel is an odd move nonetheless. Google may be an internet trailblazer but its experience delivering TV ads is minimal and it may end up competing with Disney. We know that Google has been trying to become influential in TV advertising for the past 8 or 9 years, but so far it has not been successful. Many will argue that Google, as one half of the online advertising duopoly, was an obvious choice and natural evolution for Disney. We argue that Google Ad Manager, which only launched in June, has not been put through its paces at scale.

Some Google ad tech products were handling a smaller share of the Disney contract prior to the launch of Ad Manager and accusations of a full switch out first emerged in April. The rumors were never really taken seriously, probably because the ousting of Freewheel by Google for a TV deal was improbable. This is partly due to the mistrust of Google by the TV industry and also the heavy lifting required in TV ad tech, whereby products need to be unwound and reintegrated in a reportedly arduous process. That said, Comcast is not exactly the ideal partner among TV networks given its ownership of NBC Universal.

Google’s new multiyear deal involves the mammoth task of transferring Disney’s entire global digital video and display business onto Google Ad Manager, serving as its core advertising technology platform. It includes powering advertising for all its brands and properties – Disney, ABC, Marvel, Pixar and Star Wars – across multiple channels, including live streaming and direct to consumer content offerings.

But while Freewheel’s expulsion may exacerbate the shrinking of the cable TV network side of Disney’s business, on the other hand, Google’s internet expertise could potentially accelerate the growth of Disney’s OTT video business.

Google Ad Manager is effectively the merger of DoubleClick for Publishers (DFP) and DoubleClick Ad Exchange (AdX), brought under a unified programmatic platform, along with a bunch of other simplified brands including Google Ads and Google Marketing Platform. Google bought DoubleClick a decade ago but says Ad Manager was three years in the making (so still less experienced than Freewheel’s 11 years in business) and in doing so claims to have broken away from “the traditional constraints of ad severs and SSPs to build new programmatic solutions”, including features like Optimized Competition to maximize yield across reservations, private marketplaces and the open auction.

Ad Manager is adapted almost entirely for the mobile environment, offering formats like native and six-second bumper ads, plus yield optimization techniques like Exchange Bidding for mobile apps, but it also drops in a small mention for connected TVs.

That said, Freewheel will feel hard done by having only launched its new Drive product a month ago, designed to chase large scale online advertising in the US as part of a move into the connected TV space, joining rivals like SpotX, AppNexus and Tremor. Most connected TV ad inventory is available in private marketplaces at present, but ad tech firms are hoping to grab a share of connected TV programmatic inventory, just as pay TV operators increasingly look towards smart TVs to diversify from the set top VoD and TV Everywhere environments.

Yet something seemingly amiss from Google Ad Manager which is at the heart of Freewheel’s pitch concerns anonymized data, by allowing data from each home to be searched not only by the publisher which owns it, but by potential ad customers, without anyone ever being able to collect it and profit from it. Not only can you buy advertising this way, but you can measure the effectiveness of each programmatic selection using anonymized, household-level data, and both see how well the campaign ran, and also find out who you missed with that particular campaign and re-target them.

After being acquired by Comcast in 2014, the video ad management and decisioning platform went on to bolster its technology with the purchase of French programmatic video SSP firm, offering software to publishers to use to build their own private marketplaces.

The official Google Ad Manager Twitter account has retweeted links to various pat-on-the-back articles covering the Disney deal – what’s to bet Google powers the ad inventory and profits directly from those very websites?