LOS ANGELES – Media buyers and sellers fret that intermediaries in the programmatic advertising market are charging excessive fees, resulting in a “tech tax” that drains media budgets. These commissions are likely to fall as ad-tech companies seek greater scale, said Kevin Arrix, senior vice president of Dish Media, at Beet.TV’s Beat Retreat.
“The pressure is going to continue to force the programmatic tech players in the middle to provide better economics if they want to continue to scale and get more tier-one video players comfortable with programmatic execution,” Arrix said in this interview with Justin Lebben, co-founder and director of Mediatel Events. “The tech tax is real.”
Arrix estimated that tech-related fees charged to Dish Network on its own advertising campaigns should be as much as 50% lower.
The adoption of programmatic technologies is making television ad sales more automated, leading with streaming video services that reach consumers on their internet-connected devices.
Arrix said broadcasters shouldn’t worry too much about programmatic media buying, because the quantity of premium-quality video content is limited. That differs from the digital display market, which could generate a nearly endless supply of ad impressions across millions of websites.
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“The ‘race to the bottom’ is taken from what has happened in the past with digital display – endless supply, mid-tail, long-tail – and that is not the case for tier one video supply,” Arrix said. “Broadcasters should feel comfortable about what technology and automation brings. They should love the idea that you can access 10x to 20x the number of advertisers in a programmatic environment.”
Dish Media has several sources of ad inventory, including its Sling TV streaming service, Dish Anywhere streaming app and Dish Network satellite TV service. Dish works with sell-side platforms (SSPs) such as Magnite for its programmatic inventory. That inventory is available through programmatic guaranteed deals and biddable auctions, but not open real-time bidding (RTB).
“One of the biggest benefits from a demand side platform in programmatic is that the buyer does get an omni-view” of supply, execution and measurement, Arrix said.
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