While audience measurement giants Nielsen and comScore have scrambled to meet online ad industry demands around TV's gross ratings points, WPP Group's Kantar Media has concentrated more narrowly on "return path data" – metrics derived from pay TV boxes.
While talk of addressable TV (aka advanced or "targeted TV") has floated around for over a decade, making it part of the dominant reality of television advertising has been a challenge, particularly on the cable operator side.
But addressability has now moved beyond the experimental stage, and cable companies are feeling more pressure from advertisers such as consumer packaged goods to catch up, said George Shababb, president of Kantar Media Audiences. Shababb, who will appear on a video ad panel at AdExchanger's Programmatic I/O conference in New York this month, talked about the issues surrounding the growth of addressability and its relationship to the wider concept of video screen convergence.
AdExchanger: How has the use of addressability for TV been evolving? What's driving it?
GEORGE SHABABB: The media and advertising world is continuing to see greater and greater fragmentation. As a result, more emphasis has been placed on advanced measurement capabilities that will allow us to take advantage of all the new data. We're working with much bigger databases, we're working with very granular second-by-second data. All that makes it possible to produce not just traditional measures – impressions and cumes and things of that nature – but it helps us better understand things like "commercial avoidance," tune-away levels and engagement. In large part, it's being driven by what advertisers are able to do online.
What kind of work is Kantar specifically doing in area of addressable/advanced TV? Who are you major clients?
We provide all of the measurement services for DirecTV's national and local addressable advertising. As I say, it's all coming from what advertisers have been experiencing with online video advertising. They're able to direct ads at a particular audience. They're able to get measurement on the backend. This is where we're seeing the blurring of the screens.
As the screens blur, does that mean that the standard TV measurement, the gross ratings point, becomes less relevant?
There's a lot of discussion about a standard for viewability, in the cases of display advertising and video. Let's assume that the work that the Media Ratings Council and the Interactive Advertising Bureau are doing on viewability will lead to industry adoption of those standards. Then, you have at least common starting point in terms of metrics.
There are two camps around the current discussion of metrics. There's the TV camp, which would like to see traditional measures like reach/frequency and GRPs be applied to online video. The other camp, which is more online-centric, believes that metrics such impression and time-spent should be applied to TV.
At the end of the day, there's going to be a mix of metrics depending on your particular marketing and audience needs. When you get to some of the advanced advertising techniques, such as addressability and interactivity, the metrics will favor those online-centric models because they will enable clear audience-based buying methods. Frankly, that's all because that addressability is sold that way. The DirecTV salesforce is not being sold according to day parts and demographics or by program. What they're doing is entering into agreements for a guaranteed amount of impressions against a particular target group.
What does that mean for brand advertising, which is typically sold on a reach/frequency basis? Will TV and video campaigns become more direct response oriented?
As brands place more emphasis on performance-based methods, it's not just about directing an ad to a particular audience target. It's also about closing the loop and being able to demonstrate return on investment for a particular campaign expenditure. That is the most important component.
We are tying addressable advertising to product purchase behavior. Whether it's consumer packaged goods or other categories where we have behavior information, that is becoming the norm. With that in mind, the GRP becomes less relevant. If the premise is audience-based buying, and it becomes less about the program and the daypart, the GRP will still be used – there are certain structural ways of doing business in advertising that are built deeply into the system. Over time, you will see a migration away from it, as addressable gains a larger foothold.
At what point does addressable or advanced advertising just become "advertising?" Where are we along that path?
For online, addressable is the way campaigns are bought today. That's already advertising. The growth of online video relies on the ability to provide industry-accepted measurements for PCs, tablets, mobile devices. The TV networks see that as the most critical aspect of driving the growth of online video.
If we think about TV, and what it would take for audience-based buying to become more dominant, it's a matter of scale. You have two providers in DirecTV and Dish, which are able to address advertising at a national level. But they're only able to address it for two minutes an hour as part of the inventory they get in their carriage negotiations with the channels. Between DirecTV and Dish, there are approximately 20 million households that can be addressed today.
What helps to drive the audience based model in TV is more household coverage, that means the Comcasts and Time Warner Cables bring their capabilities to market. In addition to expanding that two-minute inventory for addressable advertising, the industry will need to expand the number of networks, broadcast and cable as well as satellite, that offer advanced ads. The third thing is standards, ways of valuing the audience and pricing the ads across all those boxes, screens and channels. So we're still a ways a way from that moment when we can refer to all addressable video advertising as simply "advertising."
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