Too frequently the word “middleman” is used as a pejorative, describing someone who not only brings buyers and sellers together but also has the tendency to be an opportunistic interloper.
Look no further than the occasional GEICO car insurance commercial, TheCompanyStore.com bedding ad or any number of local siding, online flower and buy-direct prescription eyeglass and contact lens pitches for examples.
But there are times when it’s essential for someone with the right qualifications to enter the middle ground between parties to make a transaction happen. Sean Doherty sees his company Wurl doing just that in the connected TV marketplace.
A co-founder and CEO of Wurl, Doherty says his B2B network, which interconnects video producers, video services and advertisers, is mending what has proven to be a fragmented market, enabling video producers to reach a bigger footprint with their ad-supported content and advertisers to buy audiences for their commercials at scale.
In this interview, Doherty discusses how Wurl is removing the friction that has plagued connected-TV channels, content producers and advertisers; the way the parties to these transactions have responded over the past year to its offer; and how every new player who connects only strengthens the overall network.
(An edited transcript:)
TV Technology: What is Wurl out to accomplish?
Sean Doherty: We operate a B2B network that interconnects three different constituencies: video producers, video services and advertisers.
The sea change that our company is based on is this migration of viewers from legacy pay TV to connected TV. It’s hard to get everyone to agree on exactly what the numbers are but it seems like there is something like 25% or 30% of television living room viewing time now that is accomplished through internet connected devices, replacing normally what would have been pay TV. We think more than half of TV viewing time will migrate to this viewing platform in the next five years.
TVT: That looks like a big opportunity.
SD: It is a big opportunity because like traditional television for both programmers and advertisers, it is the living room experience. So, it’s high-production, lots of engagement, lots of reach—all of the things that are great about television programming and advertising. Like digital, CTV (connected TV) also has very granular targeting and measurement. Behavioral data can be gathered as well.
But the problem for our customers—both the video producers and advertisers—is that it’s very fragmented—aside from Hulu and Roku, which have pretty large businesses and ad-supported video on TV.
TVT: What’s the upshot of this fragmentation?
SD: Other than those two in the United States, there’s just a lot of tiny little $25-, $50- and $100 million pockets. Many are even smaller than that, and that’s a problem for video producers because they want distribution.
They want a large footprint to receive their ad-supported video, but building connections to each of these individual video services is very expensive to do and to maintain.
TVT: What about on the ad side of the equation?
SD: The big problem for advertisers, who love the idea of connected TV inventory, is they want to buy it at scale. They want to buy it like they have bought TV for the past 40 years, and it is just practically impossible to do it.
When we first started this business, we used to hear these kinds of paradoxical statements from our customers. The video producers would say: “We’ve got plenty of inventory, but not enough ad buyers.” And the ad buyers would say: “We have plenty of demand, but not enough inventory.”
And we asked, “What’s going on here?” It turns out the problem is they are both right, but there is a scale problem in trying to put it all together.
TVT: So, how does your B2B network remedy the problem?
SD: The simple idea we had about one year ago was to create a network that would link the video producers and the video services and the advertisers, and do it in such a way that the video producers—our main customers—could launch TV channels—live, VOD and linear TV channels—via these video services and do it pretty much effortlessly.
Once they have a commercial arrangement with a video service, they just stay on our platform and turn on the channels. We also wanted to help them make money, so we wanted to enable targeted ad insertions through the distribution that we were enabling.
In the past six to eight months, we have launched three products: our Managed Channel Services to help these companies create linear program lineups and live events and schedule them; our AdSpring product, which is basically ssDAI [Server Side Dynamic Ad Insertion] and targeting product for mid-roll advertising; and then our Data Pool product, our reporting product to provide our customers with very granular reporting on people’s behavior, what they watch, for how long, what advertising they consume, impressions and beacons on the impressions.
We launched late last summer , and what happened was the network just blew up.
TVT: Can you quantify the blowing up?
SD: Well, more video producers attracted more video services, and the inventories that got created on the network attracted more advertisers. Now it is growing some months, 30% to 40%. Pretty consistently for the past eight months, it has been growing at around 15% to 20% per month on just about every metric.
We are up to about 20 million monthly hours of viewing, and we are headed to more than 25 million hours.
We are hitting about 100 million unique CTV devices through the video services that are connected to our network. And about 30% to 35% of those become monthly access viewers.
TVT: Have you seen similar result on the advertising side of the equation?
SD: Our advertising demand is just taking off. As all of the streaming that happens on this network grows, it creates inventory. We now have about 450 million ad avails that we are creating each month and that will soon be closer to 500 million.
To fill that inventory, we run this AdSpring service that is sort of in the middle of every ad request.
TVT: How so?
SD: Let’s say you are watching ABC News on Samsung TV PLUS through our network. We are delivering all of the streaming to you. We receive an ad request when an ad pod is close to being inserted based on where ABC News scheduled it.
We get that ad request about 500 milliseconds in advance of when the ad is supposed to be placed, and then we route the ad request to whomever is supposed to fill it.
So, 4 to 4.5 billion times a month, an ad request goes across our network and hopefully an ad comes back and fills and gets displayed.
TVT: You’ve mentioned Roku and Samsung TV PLUS as two of the devices Wurl supports. Are you supporting others?
SD: We are constantly adding new devices to our network—whether it’s Roku or Samsung or Sinclair STIRR or Comcast [Xfinity] Flex and all of their X1 set top boxes for streaming. There are 25 to 28 million Roku devices, and some percentage of those become active users.
Those active users and the number of hours of viewing for each of those active users are increasing each month because the quality of the content on our network is increasing. With more hours of viewing, you get more ad inventory and more impressions. That all translates into a hockey stick of growth across this network of networks that we have built across all of these C-TV services.
TVT: Support for all of this ever-increasing universe of CTV devices must place quite a technical burden on Wurl.
SD: We have about 22 or 23 engineers—our whole company is 35 employees. They spend more time on what you just described than any other activity. Each platform has its own spec for what you need to deliver to them.
So Twitch has their own API for ad insertion, and Samsung has HLS with HLS ad markers. Roku has something else. Sling’s got MPEG TS with SCTE markers. Each of these guys has a 50- to 70-page spec about what you must do to deliver a live streaming channel or live event to them. So our job is to create what we call “connectors.”
TVT: I would imagine that’s a big value proposition—relieving customers and potential customers of the headaches associated with accommodating all those specs.
SD: It’s not just relieve them of the headache, but most of them can’t afford or don’t have the technical skills to do it. They just simply couldn’t do it.
We are trying to normalize this whole thing. We are like Switzerland in the center, or, maybe it’s more like the Tower of Babel—this big translation we do.