“The Sell Sider” is a column written by the sell side of the digital media community.
Today’s column is written by Reed Barker, vice president of cable ad products at The Weather Company.
Remember when you were a kid and you finally realized that there was no Santa Claus? There was a decision on the table: Do you tell your parents that you know and risk getting fewer presents since you aren’t double dipping between Santa’s and your parents’ gifts, or do you tell your parents the truth and risk it all?
Similarly, that’s where publishers are today. TV is a good business. Everyone knows change is coming, but when and how soon?
TV isn’t simple anymore. It conjures up different images for different people. Is TV an appliance that sits in your living room? Is TV the act of watching video on a smartphone, tablet, computer or watch? Or is TV just a concept related to video in general? I think the answer is “all of the above.”
This change has caused two buzzwords to rise to the top of the conversation: data-driven advertising and programmatic TV advertising. Naturally, since these are relatively new terms, everyone who uses them seems to be defining them in subtly different ways, which results in basically no definition at all.
Publishers end up being forced to move quickly to set a price on the value that new data analysis brings to their inventory, which can be a little scary. Trusted agency partners are a critical component in the equation to make sure everyone gets it right.
Addressable TV Inventory
There used to be two types of advertising inventory on TV: national ads and local ads. Purchasing national ads meant seeking maximum reach and frequency, while local ads allowed marketers to heavy up in targeted DMAs. Those are no longer the only two options.
Audiences can now be pinpointed to a greater degree, from broad national broadcast and cable audiences to more narrow spot cable zone-level geographies, to linear and VOD household addressable targeting.
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And, to complicate things further, there is the addition of digital video inventory. It makes sense that a marketer will want to go to only one place to buy an ad that reaches their desired audience, regardless of device and location. Advertising drives different audience behaviors based on how an ad is viewed. On mobile, an ad can steer a viewer to the nearest store to purchase shaving cream. You can’t do that from the viewer’s living room, but that doesn’t mean that an ad viewed there doesn’t still have value.
The Data That Drives The Buy
The goal of data-driven TV advertising is to use big data to identify unique audience segments and then to buy or sell them.
When trying to define a segment, you would typically start with an audience, but TV is a series of different sized venues for advertising, from the arena-sized national footprint down to the local nightclub-sized footprint of household addressable homes. Network groups have multiple audiences across their properties, and advertisers want unique data sets for their unique brands and products, so how do we close the loop?
Data-driven TV ads are not just driven by the data on the front end, but by measurement of efficiency on the back end.
A brand marketer may want to measure social engagement to prove the effectiveness of an awareness campaign while a retailer may want to use A/B testing to better understand how the different targeted campaigns drove in-store sales. Every marketer will have different KPIs for their products.
The Marketplace
Currently, there is no common marketplace for data-driven TV advertising. Network groups and MVPDs are setting up their own individual marketplaces where inventory and audiences are sliced and diced by unique data sets. Then there are agencies that use their unique data intelligence to define audience segments and locate them on undervalued network inventories.
Is programmatic the solution? Programmatic brings the promise of tools that can be used to identify and buy segments across all shapes and sizes of TV inventory. It also brings the hope that a machine can manage a multitude of data inputs so that audience segments can be bought, sold and trafficked seamlessly before getting matched against measurement data, delivering a 360-degree view.
The Publisher’s View
With data-driven advertising, publishers can use data to drive pricing up, as opposed to down. Each individual advertising opportunity can be sold at the highest price to most efficiently meet a marketer’s goals.
There will be a mix of inventory: some data-driven, a mix of direct and programmatic sales and a mix of direct-response and traditional inventory sold in units.
The key for publishers is to find that right mix. We must keep the value high for sellers, while making finding unique audiences based on data more efficient for buyers.
2015 is the year where we want to believe in the old ways of doing business, but try and understand what this uncertain future is going to look like. Stay tuned.
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