TV Will Be Bigger Than Ever. Q&A with Eric Mathewson of WideOrbit

Eric Mathewson, CEO of WideOrbit, started his career in another numbers-intensive industry - equity derivatives at Kidder Peabody where he focused hedging transactions for venture capitalists and founders of Silicon Valley technology companies. 

During that time he says he gained “a strong appreciation for the importance of systems and databases for enabling consistent profits in exchange-based transactions.” The rest is history as he used capital gained in his Silicon Valley ventures to launch WideOrbit in July 1999 as a way to facilitate the buying and selling of media.

Mathewson has some very clear ideas about media transactions and his company WideOrbit is becoming the de facto go to system for processing media transactions. I asked him the following questions:

CW: What exactly is WideOrbit?

EM: WideOrbit is a software company that develops systems for managing the backbone of media companies. We run their programming and ad systems, which handles all their scheduling programming, yield optimization, the accounting of their orders, invoices, aging and everything else a typical enterprise resource planning software system does.  WideOrbit is now the largest company in the space.  We’re managing 3000-plus stations and more than $30 billion in annual ad spending, primarily in North America.

CW: WideOrbit faced some entrenched legacy competitors in the space. How did you break through?

EM: We always focus on customer referenceability, which is a higher standard than customer satisfaction. Our products and services should meet a level of excellence where end users are willing to recommend them to other end users. Over the years, 88% to 93% of our customers said they would recommend us to a colleague. That Net Promoter Score has been a huge source of growth and competitive advantage, and it makes a big impact on a customer’s willingness to spend more money with us.

CW: How are you handling cross platform buys and sells?

EM: Transactions where DSPs enable cross-platform buying inventory are really only just now starting to emerge. We’ve prepared for this kind of demand to scale by investing in technology that enables both Real-Time Buying in digital display as well as linear audio and video inventory.

CW: Generally speaking (and I know there is a wide range of targets) what is the most efficient way to buy media today?

EM: I may be a tad biased on this point. The most efficient way to buy media today is through programmatic platforms that aggregate vast amounts of premium inventory. With just a click of a mouse on the WO Programmatic TV platform, a buyer can access and aggregate their pick from upwards of $30 billion in TV advertising inventory. Because it is so automated, a buyer can easily discern which inventory is most efficient by using our data or data that they bring to our platform. The system also simplifies all the creative delivery and billing aspects of a transaction.

CW: How dominant do you see television in the traditional sense (the TV set as hardware) five years from now for the consumer?

EM: When we look at IPG’s ad market data five years into the future, television will have a larger footprint than all the combined elements of digital content delivery, including audio and video. From our perspective, I’m not sure it matters what the composition of content consumption will be. It’s our job to help our clients maximize their revenue regardless of how their content reaches consumers. We’re aggressively investing in both digital and linear for the benefit of the consumer and our clients. Regardless of the platform used, we want audiences to continue to be consume our clients’ content and for our customers to have the tools to maximize profits.

CW: Is there any new technology that we may not foresee right now but that could be disruptive to the media space?

EM: There will always be new technologies and behaviors that might be disruptive to traditional forms of business. Consumer habits change surprisingly slowly, though. Take on-demand viewing, for example. While it’s likely that anyone reading this article uses a DVR as their primary method for consuming video, live TV viewing minutes in the US still represent over 90% of total minutes watched. This is a full 15 years after early adopters started to have the ability to time-shift their viewing.

CW: Give me a short example of how WideOrbit works as well as its challenges and its opportunities in the media space.

EM: It’s hard to come up with a single simple example when we cover so much ground. WideOrbit software is the enterprise software that runs a media company. We manage all the processes of ad insertion for clients with varying kinds of business, including NBCUniversal’s owned and operated stations, Comcast SportsNet, Fox Sports Networks, DirecTV’s advertising operations, Entercom Communications, Time Inc’s and USA Today’s web sites, Canal+ and Orange France Mobile Ad operations.

CW: Can you give me some predictions - what will the media landscape look like 5 years from now?

EM: When I started WideOrbit in 1999 with a background in the Internet, it was obvious that the future was going to be a transition from analog linear delivery of content to IP-based delivery. My Silicon Valley pals thought the transition would take about 3-5 years. I thought it was going to take 10-15 years before people were consuming most of their video or audio over connected IP devices like a connected TVs or mobile phones. Now that WideOrbit has been operating for 15 years, I still think we’re 10- 15 years away from seeing the majority of video content delivered to individual IP devices rather than as a traditional linear broadcast stream

The automation of advertising transactions is increasing at rapid clip. A huge portion of digital sold today is via Real Time Bidding, and we’re starting to see that port to Mobile as well.  Digital video is getting there, but is still mostly transacted & targeted weeks in advance. TV does not have RTB yet, though we’re poised to see a dramatic increase in programmatic sales automation.

Finally, there’s been a ton of consolidation the last 4-5 years in the broadcasting sector. I expect it will continue over the next 5-10 years, though the bulk of it is probably behind us.

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