Wednesday, January 22, 2014, 10:53 AM ET|Posted by Will Richmond
Last week at Adap.tv's Worldwide Publisher Conference, Curt Hecht, The Weather Company's Global Chief Revenue Officer shared an eye-opening data point: 1/3 of the company's online ad revenue now comes from programmatic, though it only started selling ads this way around 18 months ago. And contrary to lingering concerns that programmatic reduces the value of inventory, Curt also said
ads sold programmatically actually generate some of the company's best pricing, and that overall CPMs are up since programmatic was introduced.
Programmatic is one of the biggest trends in advertising today, allowing ads to be bought and sold via marketplaces using data and specific audience targeting criteria. Real-time bidding is also a feature of programmatic, though not always. Programmatic also reduces some of the back-end friction associated with the exchange of RFPs and IOs.
According to Curt, one of the key reasons programmatic has grown so rapidly for Weather is that the company is using it very effectively to monetize usage spikes associated with severe weather (e.g. Hurricane Sandy) and also when videos go viral. Curt noted direct sales and the buying community cannot respond to these spikes so in the past they weren't monetized. Now, Weather is selectively exposing this inventory for programmatic buying.
Curt also discussed how Weather has managed potential conflicts between direct sales and programmatic, a major point of sensitivity regarding programmatic in general. Weather gives direct sales a first look at all ad inventory, with programmatic coming next. Data has been critical in improving the value of its programmatic selling and Curt even sees some of this value now applying to its traditional TV ads.
Curt further believes that any content provider not implementing programmatic or leveraging its user data is going to be in trouble as the market continues moving toward programmatic. Admittedly, Weather's periodic viewership spikes lend themselves particularly well to programmatic, but overall the company's experience provides a great example of how programmatic can add value to traditional direct selling.
For more, Beet.tv has a good interview with Curt here: