Roku Vet Jim Lombard On How Tetra TV Gains Inventory And Trust As A CTV Ad Network

“On TV and Video” is a column exploring opportunities and challenges in advanced TV and video.

After this exclusive first look for subscribers, the story by AdExchanger’s James Hercher will be published in full on AdExchanger.com on Thursday.

If mobile and display advertising was the first stage of programmatic technology, connected TV (CTV) and broadcast advertising could be considered the second.

But there is one big question: Will ad networks – a mainstay of early digital programmatic display advertising – spring up in the data-driven TV tech ecosystem?

One early contender in the category betting on that future is Tetra TV, a CTV ad network that launched in April by early leaders of Roku’s ad platform business.

“If it weren’t for the five-plus years we spent at Roku working with these publishers and media companies, they wouldn’t work with us at Tetra,” said co-founder and CRO Jim Lombard, previously Roku’s head of ad sales and business development.

AdExchanger spoke with Lombard about the prospects for Tetra, and why the market may need CTV ad networks.

AdExchanger: What’s the opportunity you’re going for with Tetra?

JIM LOMBARD: We really saw a need in the marketplace for a neutral, independent company that works with publishers to help monetization in connected TV. Think of us as a connected TV ad network.

We have about 100 different content channels we reach. And we’ve licensed an ad server and a device graph to facilitate our work with data vendors and onboarders.

What are the inventory suppliers you’re working with?

The vast majority of our deals are on the content side. The publishers themselves or service providers like virtual MVPDs have distribution onto Roku, Amazon, Apple, Samsung, etc. Our relationships primarily sit with app developers and media companies with content on connected TVs.

I can’t share specific partners. It’s a unique situation because they have their own sales teams in most cases, and we’re playing a value-added reseller role, so there are sensitivities about that.

Is there really that much inventory available across those virtual MVPDs and OTT apps that aren’t backed by the big players with their own ad platforms?

There is. Virtual MVPDs like Philo and Tubi TV have relatively limited reach but a ton of inventory.

Say you have a service with a million or so subscribers. That million number isn’t very exciting for a big advertiser. So you need to pull together more ad opportunities and more households. That’s the opportunity for us to pool this inventory together, so we’re able to monetize it more effectively with reach and frequency.

An ad network doesn’t come with a great moniker or reputation, but it serves that purpose of pooling inventory and creating scaled value.

Any concern about those apps or services being acquired by larger walled garden types?

It’s a potential area of concern.

What we’ve seen when those companies have invested is they tend to have channel conflicts between each other. Look at Disney moving its business from Comcast’s FreeWheel to Google, and those kinds of large corporate entrenchments.

Roku is another large platform player with an ad network. But we come in and say, “Run with us and we will share transparently where your ads ran.”

That’s different than Roku, which is a blind sale. So that neutrality and lack of channel conflicts on our part creates opportunity.

And media companies want pressure on their own demand. There’s a lot of effort from TV broadcasters to multiply the number of brands they work with, to bring in more demand to pressure traditional buyers.

How much are measurement failures holding back CTV?

I remember early on in this category with Roku buyers asking if we were Nielsen-rated, which we weren’t, and it was a huge roadblock. But I also experienced when we did get Nielsen digital audience ratings and how that was a game-changer.

It does seem like measurement in the space slid off the rails, but I’m actually very optimistic.

There’s a lot of talk about addressable TV and granular targeting, but the transactions still mostly are bought on age, gender and maybe one other attribute. But data vendors like Acxiom, Experian and Foursquare are leaning in now and have strong OTT products people will come back to.

Do you think those data suppliers can make up for the lack of old-school currencies and ratings like Nielsen or Comscore?

The thing is, the bar is low in digital and mobile video. Viewability is bad. The formats are off. There are often ad delivery issues.

That means it’s almost a sure bet that as measurement evolves and the data starts to show, we’re going to beat those screens in terms of ROI.

And the other bullish thing for me is that in mobile particularly, the majority of revenue goes to Google and Facebook. But Facebook doesn’t even really have a presence in this space. There’s a lot more room to grow without those dominant platforms set.

What’s your business development plan look like?

Predominantly we’re calling on the big six holding companies. They have defined budgets in connected TV. It’s not what they have for TV, but it’s growing rapidly.

I consider Hulu the gateway drug to this space. With most buyers, that’s their first experience in CTV. Then they do their research and Roku pops up on the plan. That’s what we’re starting to see turn into more general enthusiasm for CTV inventory.

Follow James Hercher (@JamesHercher) and AdExchanger (@adexchanger.com) on Twitter.

This post was syndicated from Ad Exchanger.