iHeart To Offer Real-Time Bidding For Its Broadcast Ad Inventory.

[DavidEduardo]

New ways of doing real-time sales transactions are coming from iHeart... without dependency on Nielsen ratings and without even the need for salespersons.

From Inside Audio Marketing newsletter at iHeart To Offer Real-Time Bidding For Its Broadcast Ad Inventory.

"Real-time bidding is a subcategory of programmatic media buying in which ads are bought and sold in real time on a per-impression basis in an instant auction. Pittman and Bressler didn’t offer specifics on how this would be accomplished other than to say the company is currently building out the technology as part of a multi-year effort to allow advertisers to buy iHeart inventory the way they buy digital media advertising. That involves data-infused buying and programmatic trading, along with ad targeting and campaign attribution."

And they are moving from ratings based sales by ratings points (Cost Per Point) to new ways of classifying and analyzing station audiences.

"Radio’s largest group has also moved away from selling based on rating points to transacting on audience impressions, and migrated from traditional demographics to audiences or cohorts. It now offers advertisers 800 different prepopulated audience segments, ranging from auto intenders to moms that had a baby in the last six months."

Bob Pittman said, "And there has been no degradation in the reach of broadcast radio. The degradation has been in a lot of other media, but not radio. And the reason is because what we do is fundamentally more important than it's ever been: we keep people company.”"

 

[radiofan2023]

So will they still subscribe to the ratings if this becomes successful?

 

[TheBigA]

As the article says, iHeart has been doing automated or "programmatic" selling of airtime for years, and other radio companies have joined them in doing things that way. This idea is another way of selling time, putting it on the open market, sort of like buying stock or having an auction. This goes back to something I always say, that when you have great ratings, then you sell the ratings. When you don't, you sell something else. This idea leaves it up to the buyers to decide what that "something else" is worth. It's a great idea because the users of radio have different ideas about its value than agencies, who just look at costs and numbers. What we often find is that people at agencies are not actual users of radio, so they undervalue it.

 

[Kelly A]

I think a lot of this is to get geared up for the inrush of political coming later this year into next. The idea is to make radio easier to change messages and dayparts than it has been in the past. Advertising has gone full-on impressions, giving the campaigns the power to better focus on individual markets or communities, the times within those communities, and switch up if polling shows a particular message isn't breaking through. TV has been working on something similar, but trying to do this with audio and video, mainly from the cloud, isn't consistent across as many markets as iHeart is already in.

 

[DavidEduardo]

I think a lot of this is to get geared up for the inrush of political coming later this year into next.

However, this will not work for races where "lowest unit rate" apply. It would be dangerous to use it for those cases where certain campaigns quality and, suddenly, the bidding system resets the lowest unit rate for all applicable campaigns.

 

[Kelly A]

However, this will not work for races where "lowest unit rate" apply. It would be dangerous to use it for those cases where certain campaigns quality and, suddenly, the bidding system resets the lowest unit rate for all applicable campaigns.

It should still work. You set your political slots at lowest rate, then allow campaigns or PAC's to just grab the avails online. It becomes first-come-first served for those slots. It naturally sets up a sense of urgency for grabbing avails before some else does, and cuts way down on the process for adding or swapping out spots on the fly.

 

[DavidEduardo]

It should still work. You set your political slots at lowest rate, then allow campaigns or PAC's to just grab the avails online. It becomes first-come-first served for those slots. It naturally sets up a sense of urgency for grabbing avails before some else does, and cuts way down on the process for adding or swapping out spots on the fly.

But under first come-first served the ability to sell to all candidates at that rate could be thwarted by a sold-out situation pre-empting any further avails at that rate. Some thing would have to be constructed to make sure all qualified candidates get access to those schedules at those rates.

 

[Kelly A]

But under first come-first served the ability to sell to all candidates at that rate could be thwarted by a sold-out situation pre-empting any further avails at that rate. Some thing would have to be constructed to make sure all qualified candidates get access to those schedules at those rates.

That's exactly how it would work. Say, I'm the buyer for the David Eduardo for Senate campaign. I want to buy a block/flight of political ad spread in Riverside County. I contact (just for example) iHeart's national sales desk, and tell them I want to buy 26 hours of time in a particular geographic area. iHeart sets up the campaign's unique login page with their negotiated open political slots to equal 26 hours. The DESC uploads their first flight of spots to a folder on the the page/site and starts dropping spots into slots. As the campaign progresses, spots can be replaced or substituted in geographic areas on the fly right from the webpage by the campaign directly. If other campaigns or PAC's cancel or open slots, those slots are made available to all the customers. Same goes with open inventory not originally designated as lowest-rate political. If the stations have open inventory from other advertisers, those openings now become political slot openings and are sent to the campaigns/PACS for booking on the website on a first-come, first-served, basis.
Now radio has a timing advantage over TV or direct mail, in that the number of hands or approvals before spots can be purchased, scheduled, or swapped, is cut WAY down. No need for humans in Production to ingest spots during regular business hours. No need for humans in Traffic to schedule or swap out spots during regular business hours. No need for certain AE's to be involved with facilitating the insertion or swapping of spots during regular business hours. And to top it off, the group saves on commissions paid to AE's.

 

[radiofan2023]

That's exactly how it would work. Say, I'm the buyer for the David Eduardo for Senate campaign. I want to buy a block/flight of political ad spread in Riverside County. I contact (just for example) iHeart's national sales desk, and tell them I want to buy 26 hours of time in a particular geographic area. iHeart sets up the campaign's unique login page with their negotiated open political slots to equal 26 hours. The DESC uploads their first flight of spots to a folder on the the page/site and starts dropping spots into slots. As the campaign progresses, spots can be replaced or substituted in geographic areas on the fly right from the webpage by the campaign directly. If other campaigns or PAC's cancel or open slots, those slots are made available to all the customers. Same goes with open inventory not originally designated as lowest-rate political. If the stations have open inventory from other advertisers, those openings now become political slot openings and are sent to the campaigns/PACS for booking on the website on a first-come, first-served, basis.
Now radio has a timing advantage over TV or direct mail, in that the number of hands or approvals before spots can be purchased, scheduled, or swapped, is cut WAY down. No need for humans in Production to ingest spots during regular business hours. No need for humans in Traffic to schedule or swap out spots during regular business hours. No need for certain AE's to be involved with facilitating the insertion or swapping of spots during regular business hours. And to top it off, the group saves on commissions paid to AE's.

Would stations set limits on how many political slots they have?

 

[Don CT]

Would stations set limits on how many political slots they have?

Are they required too?

 

[DavidEduardo]

If the stations have open inventory from other advertisers, those openings now become political slot openings and are sent to the campaigns/PACS for booking on the website on a first-come, first-served, basis.

The problem is that you can not be "sold out" for Lowest Unit Rate" qualifying spots. So the system software has to be able to adjust inventory even if that means an oversell. And it can't sell a commercial account at a lower rate than political qualified ones.

I'm sure that such a system can be programmed, but it opens the door for overselling in what promises to be a very competitive (combative?) political year.

In the years I was directly involved in sales in Puerto Rico, I put quotas on every campaign. This was to avoid being oversold while giving all candidates and parties and PACs fair access. We made sure ad agencies knew we be limiting political accounts, and that allowed them to continue other campaigns; some of that "stuck" after the election and we kept accounts that normally had not used us.

 

[Kelly A]

I'm sure that such a system can be programmed, but it opens the door for overselling in what promises to be a very competitive (combative?) political year.

That's the key. Having all the political spots and avails available on the site allows campaigns or PAC's to see in real-time what's open for booking and what they already have booked. It brings a whole new level of transparency and maximizes inventory management. Everything is tracked and logged in real-time too, so logs and record keeping are much faster and cleaner than the old-fashioned way. Any new previously higher rate non-political openings that come up will automatically populate with the lower political rate as they become open. That means the GM or GSM won't need to constantly review and open avails to political. Simple rules really; If this happens within certain parameters, do that.
There would be little risk of over-selling because the system has to work within the established quota and any wild card slots that might open up randomly because some advertiser canceled. Airlines or car dealers come to mind.

.

 

[Kelly A]

Would stations set limits on how many political slots they have?

Sure, just as they do now. The difference is, you can set up rules to allow canceled or other non-political quota to automatically move to political as designed. And all this can happen in the middle of the night or on weekends with no human intervention.

 

[boombox4]

The bidding for ad slots aspect has precedence in online retail. I think Amazon has a form of it on parts of their website.

The rest of this subject is way over my head, however.