“On TV & Video” is a column exploring opportunities and challenges in advanced TV and video.
Today's column is by Marilois Snowman, CEO and founder of Mediastruction.
Nearly two decades ago, a group of top brand CMOs met secretly in the Procter & Gamble conference room. The topic: How do we change the arbitraged system of the TV upfront market? No one knew what the other was paying, and it seemed like a lot of unfair advantage to the sell side.
The ratings currency was designed to measure how many eyeballs were clapped onto a primetime program that hadn’t finished filming, with the odds more likely than not that it would never air. Furthermore, the whole system from avail to air was so convoluted, involving something like 200 keystrokes. It all seemed like a lot of waste – and a lot of margin.
What they didn’t know was that Enron, along with a handful of other startups, had tried to build an exchange for TV purchases and failed. Unfortunately, after an attempt to work with eBay, the initiative never made it off the ground. But I sense the way TV is bought and sold, especially in spot markets, is about to change.
Here are some signs.
Change is in the air
The ratings world is a hot mess. Nielsen is no longer accredited with the Media Rating Council. Comscore, Nielsen’s top competitor, is cheaper, has a valuable audience qualitative overlay, and its panel plus set-top box universe is larger. The thing is, Nielsen has always been the currency between buy and sell side – and now that currency has been disrupted with the loss of Nielsen’s MRC seal.
Like the emergence of cryptocurrency, suddenly there is more than one way to estimate value. Dual currency – with different ratings outputs – migrates the conversation from cost per rating point to qualitative insights and audience targeting.
Something else we’re seeing in the ratings world is that fewer and fewer agencies post their ratings. It’s like they’ve given up. If you’re a spot market buying team and make the decision to subscribe to Comscore rather than Nielsen – but only a portion of the TV stations subscribe to Comscore – then what’s the point of the posting exercise?
The movement away from ratings opens up a new world of innovation, including the potential for a more automated buying system.
COVID also changed viewing habits. In 2021, streaming viewership surpassed linear viewership. And you know who else changed viewing habits? Clients, who are now making it easier to sell through digital TV as part of a “TV” plan.
They “get” it because they’ve experienced it. But streaming is sold with automated tools using ad tech. There are no old-fashioned avails emailed back and forth between the buy and sell side. No long lunches and free tickets to convince buyers to invest in a certain station “share.”
If more than 50% of the TV audience is captured with streaming, and streaming is sold with automated tools, how long before linear TV hops on the automated, ad tech bandwagon?
Digital targeting tools for long-form content are getting really good. Take Peer39, for example, which provides semantic TV targeting. You can select programs where the content and language mirrors your brand. They’re also integrated with DSPs. Sure, demand will continue to exist for “reach” content like live sports. But if I can buy live or linear TV with semantic targeting via ad tech, it’s extremely appealing.
On the agency side, buyers are breaking down silos because consumers don’t journey in silos. Silos work for brands who need to channel investment at scale. But for agencies with a focus on mid-market brands, integrated buyers make much more sense. Today, it’s common for a “traditional” TV buyer to integrate streaming as a matter of course in a “TV” campaign. Live or linear exclusivity with the buying team is becoming outdated. This new broadcast buying team culture is a game changer.
For linear sellers, the competition has evolved and it’s increased, and that puts pressure on the traditional system. Their competition is no longer only other broadcast stations, but also any content provider that might control inventory on the big screen – and those providers are increasingly prolific.
Back in the day, I thought it would take a consortium of big brands to demand change to the system of broadcast arbitrage. But broadcast inventory was finite, so the sell side held more power.
So, what’s finally changing the playing field? The answer is competition.
Competition, through the power of technology, along with digital-first “TV” consumption, has set the stage for disruption.