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.
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.