How Dish Network Is Innovating To Attract More Advertisers To Television?
In October 2015, Dish Network (NASDAQ:DISH) announced that its advertising sales arm, DISH Media Sales, had initiated beta testing of the pay-TV industry’s first “impression-by-impression” programmatic marketplace for linear television. [1] Earlier in December, one of the company’s demand side partners, DataXu, was announced as its first customer on the platform. [2] Dish is using this programmatic strategy to attract digital advertisers to television, by providing them with a marketplace for television ads which is similar to their digital media experience. This platform allows advertisers to purchase targeted ad impressions by bidding against one another in a real time auction. As advertisers shift TV ad budgets to alternate streaming platforms such as YouTube, Netflix and Hulu, Dish’s programmatic solution appears to be an attempt to bring these advertisers back to television and attract a new market of “digital” only advertisers.
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Dish’s new platform is designed to integrate with the existing digital eco-system. It is an extension of the company’s addressable advertising technology through which the company delivers targeted ads to its 8 million DVR users, ads that are dynamically played during commercial breaks. Dish is now opening up its addressable advertising platform to transact on the digital ecosystem. The software will also provide ad tracking capabilities that will allow marketers to measure the effectiveness of their advertisements. While programmatic TV ads are at a nascent stage currently, according to a report from Magna Global, budgets allocated for programmatic TV buying are expected to surge over the next few years and reach 17% of total TV budgets or around $10 billion by 2019. [3] Television advertising accounts for nearly 5% of Dish Network’s valuation, according to our estimates. We forecast revenues from this segment to increase $1.8 billion in 2015 to $2.4 billion by the end of our forecast period.
By providing a programmatic platform to bid real time for its ad inventory, Dish is innovating its way into a new market of digital advertisers. The company also plans in the future to expand this platform to its alternate streaming platform Sling TV. A report by Cisco states that ads will get increasing personal by 2020. Addressability will become common and personalization will manifest itself in different advertising spots appearing for different users and in tailored product placement. [4]. As the market moves towards personalization, Dish’s focus on innovation with its addressable advertising technology, including its robust tracking and reporting mechanisms, is key to attract advertisers to television. We believe these technology enhancements will give the company a competitive edge over other players.
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- DISH Media Sales Initiates Industry’s First Programmatic Impression-By-Impression Linear TV Market Place, Dish News Release, October 2015 [↩]
- DataXu Partners With DISH Media Sales and Innovative Global Auto Maker To Drive Programmatic TV Forward, Yahoo Finance, December 10, 2015 [↩]
- Programmatic TV to Account for $10 billion of TV Budgets by 2019, Advertising Age, May 2015 [↩]
- Future of Advertising : Looking Ahead To 2020, CISCO, Point of View [↩]