If you have been around the media and advertising industry for more than a few months, you have probably heard people throw around the name Sabre Systems. Why do so many people in the industry throw this name around? What does it actually mean?
Like most non-media terms bantered around our industry, most people who refer to Sabre Systems, really have little understanding of what Sabre actually is or does. Understanding the value of such a system in media is really important to a full understanding of the challenges facing media buyers and sellers. So, lets start with the problem Sabre was designed to solve. As Wikipedia defined it "In the 1950s, American Airlines was facing a serious challenge in its ability to quickly handle airline reservations in an era that witnessed high growth in passenger volumes in the airline industry. Before the introduction of SABRE, the airline's system for booking flights was entirely manual." Sounds awfully familiar. Sounds like the reason every programmatic direct technology has for their existance.
For a quick review of the players, we have Twixt (Appnexus), 49BC (Rubicon), Yieldex Direct, Adslot, iSocket (acquired by Rubicon), and Shiney Ads (also acquired by Rubicon), PubDirect (PubMatic), and Mediaocean's Prisma.
In reality, the value of the automation Sabre provided was to overcome the issues of scaling the airlines booking workforce. There were simply too many flights, too many seats, and too many queries to manage with a people-based system. Now let's think about that in the context of direct media sales. How many media companies have you heard complain about lost revenue opportunities associated with the inability to handle the number of direct deals? Is direct sales experiencing 'high growth' like the airlines of the 1950s? The answers to those two questions are: exactly zero and no, in that order. While the efficiency of having less paperwork, emails, and calls to deal with in booking media is important, it adds very little value. Sabre was created because automating the ticket buying process for airlines in the 1950s was critical to enabling them to drive significant growth.
So how does Sabre actually create value? This is how Sabre describes itself today "...through improved forecasting and decision support. This includes a hybrid pricing environment that looks at real-time data from across the enterprise as well as external sources. This provides the most accurate information on customer choice-based forecasting, network revenue optimization, competitor pricing data and configurable business rules automation." Does that sound like anything that any of the above companies do? No, no, and no. None of the current programmatic direct systems actually solve for any of these problems.
For a bit more depth on that, "Improved forecasting accuracy and overbooking optimization with advanced modeling at the segment and fare class level... The forecasts provided include spill estimation and time-based as well as event-based seasonality adjustments. According to forecasted demand, the system overbooks and sets authorization levels higher than capacity by compensating for customer cancellations and no-shows."
Today's media companies face a very different set of problems than the slowness of excel, phones, and faxes. Yes, it is labor intensive. But, that's like saying that the limiting factor in the growth of human construction was the labor intensive work of the stone mason. Yes, cutting stone by hand is very slow and inefficient, but what changed our society was not the electric chisel, but concrete. Even if we have robots cutting stone, building with stone is simply not a scalable method. Building with concrete is. Media sales faces the same problem. The old process simply is not scalable. The current batch of programmatic direct solutions may enable publishers to do it cheaper and faster (stone cutting robots), but no one is claiming to help them do it better and drive more revenue (concrete).