Television advertising is getting smarter. And the smartest companies in digital advertising are coming for TV.

Comcast’s FreeWheel

Comcast’s FreeWheel is the broadcast ad serving incumbent, with clients like Viacom, Fox and Turner.

FreeWheel has a supply of broadcast network inventory that it can enhance with data-driven targeting because the audience comes from set-top boxes, like recorded or on-demand shows, OTT apps or desktop and mobile streams.

FreeWheel serves about half of its inventory to TVs, either via an OTT device or video on-demand (VOD). And it plans to get into linear ad serving, said James Rooke, general manager of FreeWheel’s publisher business.

The clients testing FreeWheel’s next-gen ad server products are also Comcast subsidiaries: NBCUniversal and the internet and entertainment package Xfinity X1. NBCU is the first programmer to test FreeWheel’s linear ad planner, which reorders TV commercial breaks based on its ad server logic, Rooke said. With X1, FreeWheel is testing dynamic ad insertion in live TV feeds.

While some networks are unwilling to hand the reins to Comcast-owned FreeWheel, other legacy TV rivals increasingly see themselves as allies in a larger fight with digital platforms.

For instance, television ads lose credit to search and digital media because TV is seen as top of the funnel branding, Rooke said. As a Comcast company and an ad server primarily for TV networks, FreeWheel shares the broadcaster perspective on attribution, he said, whereas Google, FreeWheel’s chief ad-serving competitor, benefits from TV’s disadvantage.

“The reason we have the client base we have and why we’ve defended it successfully against Google despite them being such a considerable force is that our incentives are aligned with our client base,” Rooke said.

Google Ad Manager

The 800-pound gorilla of digital advertising is taking on a new jungle.

YouTube, which can only be bought with Google tech, gives Google a head start. YouTube accounts for 10% of all online video streaming, ahead of Amazon or Hulu, according to Nielsen data, and Google Ad Manager (GAM) already serves a lot of mobile video ads.

Google has also steadily added more broadcast inventory to its supply-side video ad server, with network clients like CBS, Lifetime, and Disney, which it poached from FreeWheel last November.

Snagging Disney was a coup, but many industry insiders mark it with an asterisk since Disney had just resolved bitter duels with Comcast over the acquisitions of Sky TV and 21^st Century Fox.

But Google still makes a compelling pitch to broadcast media because it can bundle data, cloud services, analytics and ad serving across video, display and search.

Disney and 21^st Century Fox, which is now owned by Disney, were early Google Cloud customers and beta partners for Ads Data Hub, Google’s cloud-based audience platform. Entertainment studios spend heavily on search ads and on YouTube, targeting people looking up nearby movies and watching trailers. This allows Google to package the GAM ad server into much larger deals around cloud infrastructure and marketing analytics.

INVIDI

INVIDI works with TV networks and multichannel video programming distributors (MVPDs), including AT&T’s DirecTV, Dish Network and Verizon Fios, to target ads via satellite TV services and set-top boxes.

Those MVPD pipes allow networks to dynamically insert commercials during a linear TV feed. It’s an important way for MVPDs to generate value for TV networks they carry.

“The networks need MVPDs to make audiences addressable and us for the technology to make that work,” said INVIDI EVP Michael Kubin.

INVIDI has a leg up with MVPDs because it’s co-owned by AT&T and Dish. Its third co-owner is WPP. But INVIDI is “strictly a technology company,” Kubin said. Advertisers need TV networks aggregated to de-duplicate audiences and control for frequency, he said.

An MVPD like Verizon Fios could have competitive concerns about using an ad server co-owned by two rivals. But on the other hand, INVIDI’s main competitor in linear TV ad insertion is Visible World, which is owned by FreeWheel.

Hulu

Hulu has a proprietary ad server that controls its owned supply.

Connected TV inventory is supply constrained, and ad-free subscriptions are still growing fast. As one of the few scaled programmatic OTT sources, using its own ad server is a “key strategic advantage” for Hulu, said Doug Fleming, head of advanced TV.

Hulu operates an ad server without delving too deeply into programmatic because it has a unique deal with Telaria, its exclusive SSP. Telaria handles the programmatic ecosystem plugins, Fleming said, like viewability and brand safety verification or audience segmentation and measurement across other media. Hulu has only approved eight DSPs, so it keeps a tight rein on the entire supply chain.

Hulu’s ad server isn’t the largest, but it may be the most keenly scrutinized. Hulu has scale and a powerful backer in Disney, its majority owner (Comcast has the minority share). But most importantly, Hulu allows auction-based bidders to compete with direct sold advertisers.

Programmatic buyers want to advertise on real TV shows. And broadcasters would love to see Hulu’s programmatic CPMs outrun direct ad rates, since it would help TV prices across the board.

“For us it’s critical we don’t prioritize direct sold over programmatic,” Fleming said.

Amazon

Unsurprisingly, Amazon is like a shark lurking below the ad server industry.

Amazon was a contender with Google when Disney reviewed ad servers last year, two sources with knowledge of the process told AdExchanger.

And even without broadcaster clients, Amazon has quickly created more OTT and video supply for itself. Last October, the terms of service for Fire TV publishers were updated to require 30% of all ad impressions go to Amazon. It also dropped the popular ad free subscription tier for Twitch, forcing more ads on video game streamers. In January, Amazon launched Freedive, an ad-supported OTT channel operated by IMDb.

“I haven’t seen (an Amazon video ad server) in market but no doubt they have the capability,” said SpotX CEO Mike Shehan. “It would be a long-term concern for any media competitor to expose their inventory like that, since Amazon owns the platform via Fire TV, has its own content and has the audience data and consumption side with the marketplace.”

The hopefuls

Broadcast networks and tech companies like Google and Amazon take most of the video ad growth, but there’s room for other aspirants.

Telaria soft launched an ad server last year. And SpotX, the ad tech company owned by RTL Group, Europe’s largest broadcaster, launched a supply-side ad server last year as well. But those companies mainly work with smaller video players, like digital-first publishers trying an OTT app or ad-supported OTT channels like fuboTV and Pluto TV.

Nielsen is another potential ad server for the next generation of TV. The ratings company acquired the content recognition firm Gracenote in 2017, and uses the product for dynamic ad insertion in smart TVs. And in February Nielsen acquired Sorenson Media, an ad server for smart-TV manufacturers and media companies with streaming content, including Hearst, Sinclair and AMC.

Nielsen hasn’t made waves as an ad server yet, and would have to juggle that business with its core TV ratings and measurement – the referee typically doesn’t enter the game. On the other hand, Google, Amazon, AT&T and Comcast combine media and measurement, and the dollars seem to follow.

Innovid is a 12-year-old video ad server that’s focused primarily on YouTube and digital media companies, but streaming channels like Roku, Xbox and Apple or Amazon OTT apps are the fastest-growing part of the business, said co-founder and CTO Tal Chalozin. A third of the company’s supply now comes from set-top boxes, smart TVs or OTT devices.

Marketers will need all the entry points they can get to CTV and OTT, SpotX’s Shehan said.

Xandr has an open exchange right now, but could relegate WarnerMedia inventory to all but its own DSP, he said, like Google does with YouTube. And Disney could also create a walled garden platform for its media.