It's time to throw some shade: markets that can't support transactions for both individual units and packages will never present accurate liquidity, will never be tradeable, and will never truly scale. In TV terms, that means supporting upfront, scatter, pre-emptible, local, and addressable transactions, all through a single market.
Markets create value when buyers and sellers can easily find each other and make deals. In 2018, TV sellers are challenged by setting open market unit rates they are willing to offer to all comers, while buyers who drive the majority of revenue pay very different rates. A small retailer will pay a lot more for a 30 second spot than Coca Cola, because one of them buys a lot more ads.
In the context of a market, big buyers may never find inventory at prices they are accustomed to paying, knowing full well that they can procure the inventory through existing relationships. In traditional TV deal making, sellers sell big blocks of inventory on the basis of a guarantee and left overs are cleared, one unit at a time, by accepting resting buy orders.
Markets that can not support transactions of both individual units and packages simply can't present liquidity accurately. In markets where transactions are priced by the 30 second spot, market data creates an illusion of differences in price. This illusion exists because market data is missing a key component, the transaction size. In reality, a buyer that gets a unit rate 'discount' is spending much more money to get that rate. Moreover, other buyers who are willing to spend just as much would likely get that same rate. The problem is that some platforms lack this type of context (transaction size), causing network families and cable operators to balk at showing the market the unit rates big buyers actually clear at. And you know what, they are right! Coca Cola and Citi Bank get those unit rates because they spend tens or even hundreds of millions of dollars.
It's not that sellers don't want to sell inventory at lower unit rates, it's just that the rate big buyers pay is not available to à la carte buyers. It would be like walking into a super market and demanding the Costco price. Yes, Costco unit rates are lower for napkins and dog food, but you have to buy four giant packs of napkins or 50 lbs. of dog food. When the size of the transaction is part of the context of transaction data, people know that there are lower unit rates and know that they require large transactions. This can be seen in action on the supermarket shelf. Every buyer knows that the bigger the box of cereal they buy the less they will pay per serving. Unit rates are not a problem for the super market because the inventory is packaged correctly. Anybody can get the lowest unit rate, you just need to buy the biggest package.
Without the ability to address these pricing issues in the market, sellers rightfully look to their technology providers and balk at showing big package rates to à la carte buyers. TV sellers provide volume discounts that existing market platforms cannot accurately handle. Current technologies are predicated on constructing and managing a dizzying array of private deals and rates that create the kind of complexity we see in real-time display. This complexity has allowed middlemen to come in and extract a massive amount of value from the transaction. None of the TV sellers we have spoken to have any appetite to manage hundreds of private markets and individual rate cards.
An ideal solution allows sellers to present large packages, at lower unit rates, in the market side-by-side with à la carte buys at higher unit rates. In such a market, buyers can choose to buy at the à la carte rate, the fifty unit package rate, or the one hundred unit package rate; it is clear to buyers that lower rates come with larger packages. Further, the à la carte buyer does not get the false impression that there is a better deal out there that he or she is missing. In the same way a supermarket shows the cost per ounce of cereal for each box size, the à la carte buyer knows that there is a better deal to be had if he or she commits to a larger deal. In other words, sellers don't have to artificially segregate buyers into private markets because the market does not create the false impression that that small brand can get their buy order filled at the Coca Cola price.
Current competitor platforms either support a pre-negotiated rate card for each buyer, so that higher paying customers don't see a lower unit price, or supply prices are set unnaturally high. This means that existing platforms fail to capture the reality that demand from a buyer of 10 units and a buyer of 1000 units is fundamentally different. This demand overlaps, but it is not the same. Likewise, a buyer buying a prime rotator and one buying the same rotator with a show exception and pod exclusivity are also not the same demand.
At MASS Exchange, we have the solution: A platform capable of transacting both individual units and packages using a bid and ask open limit order book.