TV advertising is moving the way of online video advertising - with an emphasis on greater data use and audience-based targeting. That’s the conventional wisdom driving huge investments at TV networks. But in a candid panel discussion yesterday at AdExchanger’s Industry Preview, senior TV ad executives raised lots of questions about the extent to which TV will ultimately go the digital route and specifically whether sophisticated data-based targeting will take hold in the TV industry.
The session included Maureen Bosetti, Chief Investment Officer at Initiative, Peter Naylor, SVP, Ad Sales at Hulu, Marianne Gambelli, Chief Investment Officer at Horizon Media and Donna Speciale, President, Turner Ad Sales, with Kelly Liyakasa, Senior Editor at AdExchanger moderating.
On the surface, the idea that audience-based buying - using sophisticated data to allow advertisers to target specific viewers whatever they’re watching, across the entire TV schedule - is compelling for TV networks. Traditional Nielsen-ratings led ad planning resulted in prime-time inventory being most desired (and therefore most expensive). But it’s likely that many advertisers were buying these expensive spots when other more affordable and more targeted dayparts would be more effective and efficient for them. If TV networks could show, through data, that these other spots were the better route, spending would likely increase across the board, with advertisers’ spending better aligned with target viewers, in turn driving better ROIs.
At VideoNuze’s Video Ad Summits and SHIFT Programmatic Summits, we have had multiple sessions exploring these very issues (Donna keynoted a year ago at SHIFT '16). Overall, there’s been consensus that directionally this is how TV advertising will work, though there’s healthy debate around exactly how it will get there.
Yesterday’s panelists emphatically agreed that innovation in TV advertising and better serving advertisers and viewers are necessities. However, all the panelists also agreed that TV is primarily a reach medium, and so data-focused buying, which inherently narrows reach, is somewhat at odds with how TV’s role is traditionally viewed. That in turn raises questions about how well-accepted TV networks’ data-focused approaches will be by buyers.
Donna put a finer point on this saying, “Should TV be bought on an audience basis - that’s still an open question.” Further explaining, she said, “Clients have not yet determined whether they want to target audience, because it’s very granular.” Marianne noted “there’s a debate everyday - TV is about scale and digital is about targeting. We want both and we still have biases toward content.”
Three of the key issues seem to be data standardization, attribution and measurement. Data has been chaotic as each network group has its own proprietary data initiatives that buyers can’t currently synch up (and that’s before buyers bring their own data to the planning process). As Donna said, “We still haven’t proved new data is better than old data.” Marianne added, “We’re still trying to figure out the validity of all these different data sets.”
The panelists also raised questions around proof of performance and attribution. Marianne said, “We haven’t been able to prove out that new ways of buying TV are better than the old ways.” All of this of course leads to measurement and the panelists were all in agreement that measurement needs to be improved and standardized, requiring the full industry’s focus, not just ad hoc efforts from various players.
More broadly, the panelists also agreed that with momentum behind ad-free SVOD viewing (Netflix announced late yesterday it’s nearing the 50 million subscriber mark in the U.S. and 100 million point globally), TV networks have to present a better viewer experience. For now that means reduced ad loads and improved access.
Overall, I thought the discussion captured really well the transition the TV ad industry is going through. On the one hand it is trying to emulate what has made online video advertising successful - dynamic, highly-targeted ads - while at the same time preserving what has made TV successful - broad reach to generate awareness.
In particular, the panelists did a great job of explaining that there is still a ton of uncertainty around the journey TV has embarked on. Clearly the next 5 years are going to be a tumultuous time.