Horizon Media is working with True[X] to programmatically buy ads for its clients where engagement metrics—such as video views, social media likes/shares, clicks, submitted survey forms, etc.—are the "currency," in industry parlance. In other words, marketers will theoretically only pay for promotions when they are actually interacted with by a consumer. Additionally, they can customize what kinds of engagement they want for their cash.
It's an intriguing move by two players in a space where everyone is trying to get a grip on viewability and fraud. And it appears to be the first time that engagement—instead of normal exchange measures, namely cost-per-thousand [CPM] rates—will be used as the linchpin for programmatic pricing. True[X] expects the bid-for-engagement model to produce costs higher than standard industry inventory.
While Horizon didn’t name clients that would be using the system, its big accounts include names like Geico, Burger King and Capital One.
“There’s been a lot of strategic thinking in the organization in terms of how we [can] buy differently,” said Ray Romero, vp of digital activation at Horizon. “How do you start getting around activations from a simple robotic buying practice and look at doing deals that can assure you that your ad is being viewed/engaged? And the end result [needs to be] getting the most value for our clients and partners.”
In real-time bidding/programmatic fashion, Horizon's trading desk will acquire ad inventory via True[X], which has deals in place with Tribune Co. (Chicago Tribune, WGN, Los Angeles Times, Baltimore Sun, etc.) FoxSports.com, Pandora, AT&T and other major publishers. Sean Finnegan, chief strategy officer at True[X], claimed that bots cannot perform the engagement types required for his system to charge advertisers.
“It’s a fraud-proof system that we built,” he said. “With the path in which we are taking the messaging to the [viewers], they are verifying that they are human.”
Since brands can choose their engagement types, Finnegan added, the deal with Horizon means the companies “are bringing the custom story to the pace and speed of a programmatic.”
The initiative hinges on an ad unit that True[X] has offered for awhile but has never been part of a programmatic scenario. The format often starts as regular display and text ads, encouraging users to click on them to open up a full-screen experience with video and interactive capabilities.
As an example, Microsoft has run video spots on Pandora pitching four ad-free hours of music in exchange for views. Fox Sports has offered premium video content to get viewers to watch ads. (Screen-grabbed example below.) The promotions do not have to be an interruption, True[X] execs say, as they can be placed as an optional consumer experience alongside content.
True[X], though, cannot simply claim ads are seen on its own, so the Los Angeles-based company (formerly called SocialVibe) is teaming with Moat for viewability verification. Moat yesterday announced that it was one of the first vendors authorized by the Media Ratings Council (MRC) for viewability in terms of both display and video impressions.
Meanwhile, ad network Undertone acquired Upfront Media on Wednesday, as the former plans to use the latter's system to sell premium ad units programmatically.
Overall, the developments underscore a potentially huge shift in the digital ad industry. As large companies such as American Express and Procter & Gamble dedicate the lion's share of digital spend to programmatic, expect agencies and vendors to continue to move toward the money.
Whether online video can materially become a part of the programmatic landscape bears close watching. The MRC is set to lift its advisory on video viewable impressions—defined as as two seconds—on June 30.