James Rooke on how can TV compete and win against the platforms

Speaker 0 · 0:00

Welcome to the Media Unfiltered podcast. This week, we are fortunate to have James Rook. He's the president of Comcast Advertising. Comcast Advertising looks after FreeWheel, Universal Ads, and James also manages the media sales business too. Our conversation today focused a lot around what is the overwhelming issue of the day for TV companies is how can they realistically compete the ongoing surge against the platforms. We focused a lot on collaboration, consolidation, and what tools and data and services the TV companies need to do to fight against the major global platforms. One of the things that's frustrated me a little bit about being here in Cannes is the, the lack of conversation around, the the dominance of the platforms. The the the classic stat that, certainly, I've been saying is 90% of all new media spends go into three companies. That's not healthy. I work a lot in, local markets, media markets. It's really hard to compete. It's hard to have a balanced media ecosystem. It's not good for brands. It's not good for effectiveness. So, you know, I I don't wanna be negative about this, but, like, can the television industry realistically compete with the power that they're, that they're building and that they have today?

Speaker 1 · 1:18

Well, firstly, the the the big platform companies have done an incredible job of building scale advertising, businesses and should be credited. To recognize that. Right? To recognize it. It's a it's a reality, and they should be credited for doing that. I feel really, really confident, and also excited about the offense that is coming from the premium video ecosystem. The reason for that is really simple. Is that at the end of the day, marketers care about driving performance. And performance, as you know, happens at all stages of the purchase funnel. Yeah. Like, how do I, as a business, build my brand and find and, build audiences and and consumers both for today but for the future, all the way down to how am I driving, in quarter, transactions. Right? And it is very, very clear, I think, to marketers, the premium video TV, we wanna describe that, drives performance. And it drives performance at all stages to the purchase funnel. And so, I feel that truth is on our side in terms of the ability to go head to head with alternate solutions, where you have a core nucleus of a solution that is performative. So if that wasn't true, we should all sort of give up and go home. But we know it is true, and marketers know it's true. Problem, though, is twofold, at least at least twofold. One is that, premium video TV is too difficult to buy. Yep. And number two is it's too difficult to prove. So the ability of the industry to focus on make it easy to buy and make it easy to prove on an always on basis will unlock, a core product that will lead, I believe, to a meaningful share shift of dollars, out of a small number of players, and the pendulum will swing back, because we're gonna be judged on performance. Yeah. The only other thing to say is when you're judged on performance, you have to be judged on a level playing field. And as I've talked about your event in, London on this, right now, the big media companies, candidly held to a much higher standard than other companies that are competing for the same dollars. That is highly problematic because the big media companies can out execute on the two things that I articulated, make it easy to buy, prove it works easily. But if the way if if the scoreboard is broken

Speaker 0 · 4:25

and set up in a way where one side is measured one way and the other the other, you have a problem. I think on that last note, we we've failed as an industry to bring the others up to the standard of television. And one of the issues that you've got in telly is the sheer cost of the transparency and the, insights that we provide as an industry, and that's becoming harder. It's becoming way, way harder. And in fact, when you look at the data, more and more spend is going into nontransparent areas. So do you do you think the TV industry should go down a level, or do you think we should campaign to bring the the more the digital side up to our up to our higher standards? I think it's neither. Oh.

Speaker 1 · 5:05

Just to be difficult. No. That's fine. Or maybe I'm gonna give you an answer, and you're gonna tell me if the answer was up or down. Yeah. But the the the the first thing is we should not compromise on transparency.

Speaker 0 · 5:22

They As an industry or as TV people? It's TV people. Right.

Speaker 1 · 5:27

Because I believe, ultimately, it matters that we are able to have a relationship with marketers of all sizes, from small businesses up to the biggest brands of the world, where they have confidence that where their ads are showing up is where they want them to show it up Yeah. To show up. That's the first thing. I don't believe that, players that are more opaque and, more of a black box solution are going to change and become more transparent. I I don't think so either. I think it's a fool's errand to think that those that are transparent are suddenly gonna get those that are not. Yeah. It's not gonna happen Yeah. In my opinion. Yeah. Which is why I can't remember what was up and what was down. Yeah. I think the the better point of attack is being authentic to, to to what we talked about is is maintaining transparency. Everyone knows where an impression delivers. But, again, leveling the playing field in terms of being judged in terms of the outcomes that get delivered and outcomes at all stages of purchase file. So the example of that with Universal Ads, just to make the point, is Universal Ads has done two things, starting to do two things. One is it is enabling businesses who have never bought TV to buy TV as usually a social. So that matters because there's millions of businesses out there that have been conditioned in a good way about simplicity. And this is where the big tech companies need to be credited for making it super, super simple. That's sort of number one. But number two, and I'm gonna narrow in on medium sized businesses, and these are businesses that spend millions of dollars every year on advertising, but spend zero on TV. And they're frustrated because they want to grow their brand to the next level. Yeah. But The messy middle, I call them. The messy middle. They're they're tapping out in terms of audience. Yeah. Yeah. They want to tap into the performance power of TV. Now those companies are highly sophisticated in terms of how they measure performance, and a lot of them are focused on incrementality. And I'm a big fan on transacting on incrementality. Because, ultimately, the best businesses are economically rational, which means that if they spend $1 with you and they get $1.10 back, they'll put another dollar in, another dollar in. And incrementality measurement, I think, is so valuable because if there's 10 I'm making this the math simple because my math isn't good. If there's, you know, if if there's a $10 of incremental sales lift that happens from a campaign and that marketer has worked with four different players, three social video players, and now let's say universal ads representing premium TV, there can only be $10 of credit given. Yeah. Yeah. Not everyone can say, oh, we delivered a 100% of the $10. Yeah. And what we're seeing is the the premium video ecosystem, when it is put on a level playing field, is outperforming those other players in terms of incrementality, which makes sense because coming back to my first answer around the core nucleus Yeah. Of premium video, it is performative. Yeah. And so I think to your up down question, keep being transparent, but figure out how you move to incrementality type measurement model, at least for a subset of advertisers

Speaker 0 · 9:01

where you can be, you know, transacted on a on a well, sorry, measured on an apples to apples basis. And I feel really good about our hand when we do that. No. I I agree with you, but you do understand the challenge that TV companies are in. A lot of them are in cost saving mode. The, the level of complexity and actually building incrementality is incredibly expensive. I mean, we can't even really solve the the the politics around JIX at the moment. They require more investment. And a lot of TV companies are going, hang on a minute. We're spending tens of millions on these. More spend is going outside of them. How do you like, how do they maintain that investment? I'm with you on the transparency thing. I worry that as more money seeps into other areas of media outside of those networks, these companies who pay for that level of transparency are not gonna afford to build those solutions in the forward. How do you solve that problem?

Speaker 1 · 9:50

Well, firstly, it's a it's not an easy problem to solve. Right. I I know I maybe articulated it. It's not a kind question, but But it it's okay. Yeah. You you wouldn't be doing your job if you weren't if you're asking kind questions. What you know, the big media companies have a challenge, which is the curse of incumbency. In, they are trying to of of which Comcast NBC Universal is one, is which we have a scaled traditional TV business, that is is managed and executed on different technology stacks with different measurement standards and, you know, I could say different different loss of times versus growing streaming businesses. And you're trying to stitch those two things together. Whereas if you're buying

Speaker 0 · 10:40

social, everything is delivered on a 100% IP. Isn't that crazy, though, that fragmentation? You you you own the media company, which is an incredibly powerful one, and the technology, yet you're still you're trying to stitch things together.

Speaker 1 · 10:52

Well, it's not crazy because the reality is that the delivery mechanisms of when you're delivering over an IP stream Yeah. Versus that's delivering through, you know, a cable infrastructure or a telco infrastructure or a satellite infrastructure is fundamentally different. Like Yeah. The signals that you're able to get is just just different execution parts. And yet a marketer and a consumer don't care. They're just like, I just wanna find my audience. Yeah. But when you're having to execute in two different infrastructures, which is just a reality, this is my point in the income of the, you know, curse of incumbency, You built a really big business on a traditional infrastructure that the world's going to new. It's not as easy as turning off the traditional infrastructure where a lot of the scale exists, which is why one of the things that FreeWheel is so focused on and is so critical for all the big media companies is how do we take, what is an incredible amount of scale that still exists in linear TV and be able to transact it as similar to streaming as possible. So within the Comcast and I'm gonna sort of bring it up. Within the Comcast world, Comcast advertising, as an example, is able to take our linear inventory and have it transacted through demand side platforms the same as streaming Yeah. Which matters so we can open up those new dollars. And so, ultimately, if I had a magic wand and you fast forward ten years from now, there is no linear and there's no streaming. It's all IP delivered and it's all video. So we're we're living through these sort of awkward teenage years. And to your point, it means that you are at a you you you have a problem because you can't move necessary at speed that you would want to when you're competing with all IP, you know, players that deliver everything on IP. It's where I think AI actually becomes a tailwind for the big media companies. I think it's gonna enable an acceleration of development against core capabilities to close some of these gaps. Yeah. And so I think it's a tailwind for us versus a headwind. Does traditional media have the, CapEx capabilities to to invest in that that future? It's a future that I, personally,

Speaker 0 · 12:55

I I I struggle to sort of challenge because I believe in it too, and I think that is the the the, direction of travel. Do they have the the

Speaker 1 · 13:03

the the means in order to invest in that future, do you think, from your position? I think that's a company by company Yeah. Math equation. Okay. But it's you know, it comes down to how much you believe in the importance of advertising. And I would argue I think every big tech company would argue every company who's got into advertising is advertising is here to stay. It really, really matters. Yeah. And, do we wanna do do do do do bigger traditional media companies want to participate in the advertising ecosystem? I think that is gonna be a strong yes across the board. That doesn't mean it isn't complex about how do you think about the investments needed to make the transition. Yeah. But if you don't make the transition, then you're not gonna participate in what is a massive total addressable market. I think the only other thing to say is this is where partnership becomes absolutely crucial

Speaker 0 · 13:58

because I would argue In the ability to to deal with the CapEx stuff and the investment. Is that what you mean? In the ability to,

Speaker 1 · 14:07

expediate the development and deployment of capabilities That's insane. That will future proof companies to make the transition. Yes. So, you know, this is why FreeWheel, as one example, has a very clear strategy, which is like, look, FreeWheel will provide core infrastructure for, for for the for the ecosystem, but it will open up its APIs and enable, its partners, its clients to develop on those APIs to move at the pace that they need to in a world of a new AI technology frontier. And, like, that really, really matters because you want each company to have the ability to deploy. This gets your your your CapEx, OpEx point. You you don't want as a I don't believe as a media company, as an inventory owner, to be resolving problems that have been solved in core plumbing. Yeah. You want to be able to focus your products and engineering, capacity at creating unique differentiation on top of sort of core infrastructure. And that's the the the approach that FreeWheel's taken that I think is resonating really well in the market. Because not only does it does it enable, focused, deployment of resource of which when there's financial pressures that you're facing, you need to do. You can't build it all. I mean, you can, but I you're solving problems that have been solved already, and you have a limited amount of capacity or resource capacity to deploy. That's sort of number one. And number two, it enables us as an industry to move more as a platform and bring collective scale together. So I think that is a smart path to help answer the question that you've Yeah. Collaboration, maybe even consolidation will help

Speaker 0 · 15:57

fuel that investment that's required. You mentioned incrementality. It's a metric that I completely believe in as a as a way of measuring. You know, did it not did that media drive a sale because you can often sell to a heavy buyer who's likely to buy and get a false attribution, and the the platforms are investing aggressively in that and building these models that are very, very capable. One of the areas I like to look at is if you look at all the spend that has gone towards social media, the Googles, and the rest of it, is, is it possible to take spend off the list so much money in search? There's so much money in Meta. Like, Meta grew 23% last year from an audience base, audience growth base of 3.7. How do we is it a lot of people say when TV money comes out of the ecosystem, it's almost impossible to get back. Do you fundamentally believe that's true? Can we get money back off these companies?

Speaker 1 · 16:49

Go go. My the answer to my first question is the answer to this question, which is, like, which is I fundamentally believe, I think, many of my peers do the premium video is performance performative is performative because, I mean Have you seen it in reality? Have you actually seen with UA? That's what's happening with universal ads. That's why it's one of the best. Right? Yeah. I mean, look, you you just saw, you you were seeing you saw you saw an acquisition happen this week with Walmart buying, you know, buying Vive. Yeah. You see, I think all the big media companies understand that going on offense is what is necessary here, and you have to solve two core problems. You have to make it simple because humans like simple, and you have to prove that it works on an always on basis. Those are non trivial things. Actually, the first one is much easier than the second, but they're they're not easy. Yeah. But if you do that, again, it comes back. You have a core nucleus of something that is performative. And if that's right, you're dealing with economic economically rational marketers who ultimately want to be able to move products off shelves and build their brand and and find new audiences and stuff. Now if if premium video doesn't work, we have a problem. Yeah. So you have to It won't always work. That's just the nature of advertising. That that is totally fair. Yeah. And and no one is saying that it should be a 100% allocation across. I'm saying that there is an overallocation to certain channels right now. Yeah. But there's an overallocation because they've done an incredible job of making it easy to buy and providing outcomes that

Speaker 0 · 18:27

the marketers feel good about. Yeah. I I totally agree. And one of the, one of the things that we did as a as a TV or as a video industry is in this drive to be simple and be where the buyers are. We built, particularly in The US and some other markets, they're very complex programmatic ecosystems where we've got which has caused a lot of issues, in my opinion. You have a lot of, supply that's coming to the market. That's probably not the same quality. You've got data issues. You've got, obviously, fraudulent, problems as well. And and CTV actually gave TV, a really good lifeline. It got took Claude Briers really excited. You know, the ability to measure, like, digital, apply data, by audiences. But do you think because of what's maybe occurred a little bit in The US, we sort of muddied the waters a little bit and we sort of failed in our CTV promise, if you like.

Speaker 1 · 19:18

So so I think two things here. For for me, this is a really basic answer. CTV is at the end of the day, it's just watching the same content through a different a different consumer distribution measure. Right? But there's a different fundamental way of buying CTV. So I'll get that. I'm just so so I'm with you. Apologies. No. No. No. No. No. No. But but I'm but I'm with you. But I'm trying to, like, look at it through the lens of the consumer. The consumer is like, I just wanna watch Love Island. Yeah. I know. I I whether I turn it on through my, you know, my Sky subscription, my Xfinity, subscription in The US, or I'm watching it through Peacock. So I know. I'm just watching Love Island. Right? And I say that because this is where, actually, I think the TV industry, if we can solve some of the plumbing issues we talked about, has an ability to bring together a ton of scale where this delineation between CTV and traditional TV should be moot over time. Yeah. We're just delivering audiences, and we're delivering audiences to deliver outcomes. Right? That's it. And where that's happening is abstracted away. Again, easy for me to say Yeah. But that's where we're focused. Yeah. Like, Kalex. That's the first thing. The second thing, though, to your point, and it's well made, is, yes, like, we're tripping over our own shoelaces in making a a a a value chain overly complicated, bloated with a bunch of intermediates intermediaries that are taking away working media from the end marketer. Yeah. Which in when you take away working media for the end marketer, then you, you blunt your ability to actually deliver better performance outcomes in the first in the first place. Right? Yeah. Yeah. Plus, add on top the complexities that adds for the media companies, in terms of having to deploy solutions that they don't wanna deploy, plus the latency issues that it creates when you have multiple hops down. I mean, I could go on and on and on. So it's mess. Isn't it? And it's not good. And, ultimately, we're focused on how do you get root demand to root supplies, the crow flies as best possible. And if you could do that, it's good for the consumer experience. It's good for working media,

Speaker 0 · 21:33

but we are a long way from that today, unfortunately. Yeah. So a direct start to supply path and, fewer intermediaries. I I totally agree. So let's look at the the SME stuff. You you've mentioned UA a couple of times. It's been live in the in The US, forgive me if I got this wrong, but about eighteen months. Yeah. How's the launch in the in The US going? And then talk to us about The UK because you announced The UK last year, and we're a year on. It's not quite launched in the market. When's that coming out, and what will that look like?

Speaker 1 · 22:03

Yeah. Sure. Well, we're super happy at Cannes this week to to announce the the formal launch. I know we talked about it last year. There's been a lot of work going on in the background, but we're, you know, we're ready to go in The UK. And Okay. And super live in The UK? Is that is that It is. It is. Very close to me. It is. We're And I'm not trying to trip you up. I'm just trying to understand where we're at. We're we're doing we've been doing test campaigns. Awesome. We're ready to go. Okay. I won't, you know, I'll defer to the broadcasters, in terms of in terms of what the go to market looks like. But, yeah, this is not a press announcement. The the pipes are working and ready to go. K. And we're super privileged to be able to work with ITV, Sky, and Channel four because they represent such an important part of the market. And they, similar to The US, see the same thing as we've gotta make it simple for net new buyers to come in, and we've gotta be able to prove that that it works. And so, you know, whether it's in The UK, you know, France, Australia, Canada, US, I think the good thing is there's shared kinship in having a joint problem that we need to solve. And if you can be helpful in that, we're we're sort of we're we're all in. In The US, we have 22 plus publishers now. There I think the, the the the sort of state of play is we feel really good that we have a product that is, from a buying experience standpoint, as simple to buy as social. We're working right now on two things. One is maybe three things. One is how do we, how do we condition these new to TV advertisers around incrementality and understanding Yeah. Performance patterns. There's a lot of hand holding that's honestly needed to do that, but the excitement is sort of huge because of the performance path, what the ecosystem can grow. So that's sort of number one. Number two is, you know, geeky, but we're spending a lot of time as we work on, the right attribution that makes sense for the different subsegments that Universal Ads is is supporting is how do we then invest in our algorithms to be able to optimize against those performance outcomes so we can deliver sort of better results. There's a lot of technology and engineering investments going in in, making those algorithms as formative as possible against the outcomes that matter. And Yeah. And different subsegments of the market care about different things. If you're a really small business, you know, like a plumber, as an example, you the KPI you care about actually is an incrementality. It's like how many leads were generated, how many calls did I get. Yeah. Yeah. You have to be able to optimize against that, which is different than, you know, medium sized business that spends millions of dollars. It's like, I care about what what allocation I should give to what media channel, and therefore, what should it be into premium video with universal ads as the front door based on the incremental lift that it's delivering. Yeah. Yeah. And we're feeling like the case studies are are piling up in a super consistent From The US. I've had it in there for nearly two years. They are piling up in a super consistent way in terms of time.

Speaker 0 · 25:09

Be a bit more publicized than perhaps. We could do that. Yeah. I think so because we need to prove we need to prove it does. So I've got a couple of really quick questions on this in the spirit of time. Are you satisfied with the success of the launch of of UA in The US? I mean, it's see, it's I think it's easy to underestimate

Speaker 1 · 25:26

the groundwork that the that the platforms have done in the SME market. Are you satisfied where it's at? I'm very satisfied where we're at. The reason I'm very satisfied where we're at is, strategically, it's absolutely the right thing to do. Yeah. And, philosophically, we're taking an approach which is consistent that Comcast has always taken, which is the approach is taken with free will, is we're moving, with an industry solution. Yeah. Because if we all roll out all our different ad managers and all the above, we're gonna propagate the complexity Yeah. Issue. That's sort of number one. Number two is you're right. We are an two is you're right. We are, as a as a as an industry, we are playing catch up in terms of engaging with sets of advertisers outside, at least in The US, the 14,000. And that is going to take time. But the cost of not doing what we're doing with universal ads, is is is is that you are going to be continuing to fish in the same same pool of larger advertisers who have always bought TV Yeah. And that is not the right thing to do. Yeah. So, by the way, for those same advertisers, we have to be able to do the same thing. This isn't a universal ads point, but it's just all of us as media companies is make it easier to buy and prove that it works as well. Yeah. So that same the same two strategic pillars matter for Fortune thousand as as well as they do out, but we have to go on offense. Yeah. So, you know, now I think on universal ads, we have the mouse trap where we need it to be. It's built on top of free will, which is incredibly important because it's sort of core ad server. The fee structure we have is zero to the to to the marketer, which is really important and is very different from others models. And the reason that matters is it means we can maximize working media Yeah. For the marketer, and by doing that, deliver better performance. So we feel really good about the business model, feel really good about the technology stack. Now it's about driving

Speaker 0 · 27:17

demand through it, which is what we're ramping up to do right now. That was an interview with James Rook, who's the president of Comcast Advertising. I wanna thank James for his time and for his team for putting that together. And once again, this is not investment advice. And, of course, thank you, listeners, for listening.