The TV ad makeover is gaining steam, judging by comments on the ground this week in Cannes.
Cablevision and NBCUniversal/Comcast are talking up the data granularity and addressability of their millions of set-top boxes, and agency buyers are crowing about results they’re seeing from programmatic TV activities.
For example, Modi Media, GroupM’s addressable TV agency, has transacted $122 million worth of targeted TV buys since its founding just over a year ago.
“I think it would be $250 million if the industry had the capacity to do it,” GroupM Chairman Irwin Gotlieb said during a Tuesday event hosted by AT&T Adworks.
Gotlieb is pretty old-school, having logged 47 years in media, but he is fully on board with the new TV wave.
“We really believe that television 2.0 is just around the corner,” he said. “Television 2.0 will be just like television 1.0, except it will be powered by granular data. Not only will it be driven through dynamic ad insertion and addressability, but it will also have synchronized second-screen addressability and … transaction ability, and that really changes the role of television as a media.”
Case in point: Cablevision on Wednesday trotted out results for two addressable TV campaigns that were delivered to some of the 3 million households it reaches in the New York City area.
For one auto marketer, Cablevision used Experian data to identify 686,000 cable households deemed in-market for a new car. Working with Modi Media, the car company served ads to those Cablevision households at a cost of $383,000 in media spend.
By using a test and control group (i.e., withholding ads from a subset of in-market buyers) and then tracking post-exposure conversions, it said the campaign generated incremental sales of 75 cars or just over $3 million in vehicle sales. After subtracting $382,500 in media costs, the auto client’s return on ad spend was $2,784,000. Even in the GRP’s heyday, that level of ROI measurement never existed in TV.
In another example, Cablevision used set-top viewing data to support an unnamed TV network’s tune-in campaign. Ads were served to households that had watched at least five minutes of the show’s previous season. It found and served ads to 963,000 households matching that profile, leading to a 19.4% lift in viewership for those who saw the ads versus those who didn’t.
Sound like digital measurement? That’s because it is.
“You have to remember, this is television,” said Michael Bologna, president at Modi Media. “We can identify those households that are in the market to buy a car or soup, and I can go to clients, and say, ‘Here’s how many households saw your ads and here’s how many bought a car, or bought a can of soup.’ And, if someone became a new soup customer, here’s where we stole share.”
For agencies, the speed of audience activation is one of the most transformative aspects of using technologies such as Cablevision’s. Whereas six months ago it might have taken Modi upward of two weeks to manually compile an addressable audience, Cablevision’s Total Audience Application can now match cable audiences to a third-party data set in minutes.
Cablevision is not the only company offering granular audience targeting.
NBCUniversal has been aggressive in activating data for its broadcast network and cable channel audiences. Comcast has cable boxes in 20 million homes and can combine data from those devices with insights from a wide swath of NBC programming and audiences. Those ratings can inform everything from content development to acquisitions of new shows and advertising.
“There’s been an accelerated push toward automation and programmatic,” Linda Yaccarino, NBCU’s chairman of ad sales, said during an AOL panel in Cannes. “We’re able to bring all of those data sets together for the first time and offer our customers more of a refined media plan. It’s an aggressive step – you expose the value of data in different ways.”
The Many Uses Of Set-Top Data
There are a bunch of ways networks and marketers can activate the audience information surfaced from cable boxes. Sure, Cablevision’s case studies show there are opportunities to juxtapose TV viewers with first- and third-party data sets for targeting purposes. And sure, NBCU is using that same information to develop programming.
But new systems also improve the overall accuracy of TV viewer data, and that’s good for everyone. Nielsen’s panel of 52,000 respondents doesn’t hold a candle to Cablevision’s 3 million households, from an accuracy standpoint.
And the cracks in Nielsen’s linear foundation are starting to show.
“We don’t believe much of that decline is real,” said GroupM’s Gotlieb, referring to a dip in linear TV viewing reported by Nielsen in Q4 2014. “We think the yardstick is broken. There is a bit of a decline in terms of advertiser-supported television viewing, because VOD [and] Netflix are taking a bite out of advertising. That’s not a good thing.”
But Gotlieb noted Nielsen doesn’t capture VOD and it doesn’t capture cross-device viewing. Nielsen, however, says it will by next year. GroupM estimates as much as 75% of the Nielsen-measured “decline” can be chalked up to these shortcomings. GroupM, like a growing number of agencies, doesn’t care where the programming is viewed or at what time – only that it’s of high quality.
For the networks and cable companies, Nielsen’s blind spots are an opportunity: If they can prove the value of discreet audiences not captured by mainstream TV measurement, they can sell those audiences for a considerably higher price.
“There’s a lot of viewing not measured, a lot of audiences not measured, which to us meant a lot of impressions were undervalued,” said Ben Tatta, president of Cablevision Media Sales.
Measuring Outcomes
The increasingly measurable nature of television creates new opportunities around attribution. TV sellers are suddenly keen to replace mushy metrics like “unaided awareness” with solid KPIs.
UK-based cable provider Sky, whose year-old addressable TV platform is called SkySmart, has begun selling a portion of inventory on revenue shares rather than cost of media.
“Some deals we’re doing include no headline cost. It’s all revenue share,” said Jamie West, deputy managing director for Sky Media, during AOL’s Wednesday panel. “It’s encouraging us to think very differently about how we transact and what that relationship looks like over time. It means we optimize the campaign midway through.”
NBCU is also structuring deals more geared to advertiser goals. “We are moving toward a ubiquity of audience selling and guaranteeing outcomes,” said Yaccarino.
New performance metrics and targeting options will change the negotiation process.
“We look at the TV guys, across the different assets they have to sell, whether it’s linear TV, online video, whether they have inventory to be bought programmatically,” said Chris Williams, president of Interpublic Group’s MAGNA media investment arm.
He added, “You build out a more comprehensive deal than you used to, that cuts across those different areas. You’ve got to discuss what the business rules and commercial terms are around those different types of buys. That’s different than what you used to do: Agree to a CPM on a broad demo for a sum of money across a range of clients.”
But compensation models haven’t fully shifted.
“This is a transition year for hybrid-type of agreements with customers,” Yaccarino said. “The hybrid agreements are based on a behavioral target you’re trying to achieve. How can I prove to my advertising customers that we helped them sell more product? There is a need for us to sophisticate our tools in the US particularly. The infrastructure inhibits us from moving faster.”
Sky’s West agreed: “We’re going to have a mixed economy for some time to come. Programmatic is not the answer for all advertisers.”
‘Programmatic’ Vs. ‘Addressable’ TV
This being ad tech, the jargon of new wave TV buying is still being sorted out.
“Addressable is a subset of programmatic,” said MAGNA’s Williams. “Programmatic can encompass two or three areas. Household addressable is one, enhanced efficiency is another, and that can split into performance-type marketing. … Honestly, if we’re spending $100 on programmatic TV, we’re spending $5 or $10 on addressable. It’s still a small proportion of the overall programmatic TV spend. ”
The larger point for MAGNA, GroupM and others? The steady march of technology to make the television buy smarter.
Yaccarino said, “The velocity of change has stopped everybody dead in their tracks, saying, ‘We have to do something.’”
Ryan Joe contributed.
