Advertising technology vendors face a critical couple of years with a double dip pricing collapse projected by 2020, so it was fitting that Faultline Online Reporter spoke with a start-up called Tatari this week – a two-year old outfit addressing the accurate measurement of IP-delivered ad campaigns. But can the fledgling vendor and others like it sustain this growth in the face of harsh times ahead?
Tatari’s CEO and co-founder Philip Inghelbrecht, one of the founders of Shazam no less, began with the usual speech about the swing of TV ad dollars from traditional linear to online, while highlighting that linear still represents a 20x greater market than IP-delivery as it stands. Where Tatari slots in is the measurement and optimization space; not the most glamorous of fields, admittedly, yet guiding media firms through a transition process which fundamentally will alter the delivery mechanism of their ad businesses forever is becoming ever critical.
Beyond Shazam, which is in the process of being bought by Apple, Inghelbrecht reckons his experience in advertising from time spent in the automotive sector puts Tatari in good stead for tackling measurement for bid optimization.
First things first, we immediately took issue with a statement we were sent pre-call. “Tatari is the new and only tech platform for buying and measuring TV advertising across both linear and connected TV,” read the claim, to which Inghelbrecht immediately back-tracked and instead replaced with a claim that it can measure campaigns better than anyone else – but admitted not to be the only one as previously claimed.
Marketing jargon aside, Tatari summarizes its vision as a trilogy of books. First is the measurement of linear TV advertising (2017-2019), second is the measurement of OTT and connected TVs (2018-2020), and finally, self-serve/automated TV buying (2020+).
Tatari works on the demand side not the supply side, so Inghelbrecht stressed that Tatari is not pushing for change in the industry, nor is it waiting around idly for a dramatic change, but is more in the area of demonstrating that TV advertising works and is actively encouraging the adoption of streaming, while a platform like Facebook will discredit advertising.
That said, he name dropped Facebook as one of his company’s chief rivals, also saying incumbents are going about things all wrong by approaching the measurement of streaming TV like digital. Household-level targeting, different buying and targeting parameters, frequency capping issues, cross-device issues, and no programmatic capabilities, are all issues for automating the media buying process.
Enter our old enemy, the dashboard. Thankfully though, Tatari’s looks pretty easy to navigate. Its analytics offering reports results from components including network, creative, rotations, program, conversion, brand measurement, and soon it plans to add demographic analysis, genre analysis, and reach and frequency projections. Metrics covered include near real-time cost per 1,000 impressions (CPM), cost per visitor, cost per install, cost per acquisition, response rate, brand amplifier, and conversion rate.
Tatari pitches itself on bringing new advertisers to the TV industry, with over 80% of its clients being debutants, citing cinematic television magazine Pilot TV as a customer case study and doing so with as little as $50,000 spend.
Its data-driven Media Buying Assistant platform shows bid optimization through elasticity testing, clearance projections, CPM calibrations for set top impressions and DVR behavior, as well as program analysis (e.g. first run vs re-run). Coming soon are projected CPV values with confidence interval, along with a self-serve media plan.
We began this article by painting an ominous picture for the TV advertising industry, which comes following a forecast from our research arm Rethink TV published a fortnight ago showing a double dose of price corrections over the next five years, due to the effect of SVoD and the emergence of original content on pay TV subscriptions, and ultimately on ratings which drive broadcast advertising revenues.
This forecast sees US broadcast TV advertising taking the hit first, a full 20% softening in price, only cushioned by some improved uptake of addressable advertising. This fall will occur over 2019 and 2020, caused by the rising tide of SVoD and vMVPD viewing, which sees broadcast ratings plummet even further.
A secondary hit will happen when major US sports begin to go online and, in some cases, direct to consumer, thus lowering the interest in live broadcasts. European advertising markets will mimic this behavior later, and slowly so will all TV advertising markets around the world.
This will come home to roost in a collapse in advertising value late in 2019 and early in 2020. At the same time, more US homes will cut the cord, resulting in fewer pay TV homes, and more and more advertising opportunities with long form digital virtual MVPDs and others.
We feel this report aligns well with what we learned from our brief conversation with Tatari this week and therefore its insights should resonate with the wider advertising industry. The full report can be purchased here.