VideoNuze Ad Summit 2019 leaderboard - 5-11-19
  • Perspective What's this? TV Companies Must Build A Common Audience or Lose to Digital Giants

    TV programmers like Viacom and AMC are in the same position that print companies like The New York Times and Conde Nast were ten years ago. As consumers moved to reading content online, the legacy publishing companies figured they could replicate their business on a new channel. No one could believe that a tech company with no real content could compete for brand advertising budgets. We all know how that played out.

    Now, consumers are cutting the cord and moving to digital channels to watch TV. There is more to lose on both the buy and sell side during this time around. TV advertising is considered by advertisers to be the holy grail of inventory, and they don’t want to lose it any more than the TV companies do. However, the siren song of audiences at scale and with technical ease could change their minds.

    Facebook and Google have huge audiences on digital video compared to TV, and brand advertisers are gobbling it up today. Who’s to say they won’t follow these two companies or new upstarts as they enter the advanced TV market faster than the TV companies?  Advanced TV startups are popping up right and left to snatch up advertiser media budgets and enable publishers to delay investing in their own advanced TV strategies by offering services and taking a cut of the profits.

    Publishers competing with Facebook and Google on a media plan today differentiate with content quality. Good content won’t cut it in the age of TV and digital convergence. First, there is rising competition in the quality content category. Digital native companies like Vevo and Dude Perfect command high prices.  Second, advertisers are focused more and more on audience buying, and what that requires is scale and technical expertise, which Google, Facebook and new aggregators have.
    TV companies need to combine great content with massive audience scale and technical know-how across screens.

    Programmers, the TV companies that bring TV content to the table need to bring the scale they have on TV in order to compete online. They need to work together, and work closely with the cable companies (MVPDs.) Comcast, AT&T, Cox, Verizon - these companies have the ability to create a dominant audience and technical infrastructure that could compete against Google and Facebook, or a new aggregator, but they have to work together.

    Digital media is awash in crazy audience data, from third party cookie data to custom segments dreamed up by every individual publisher. TV companies are joining right in, installing their own data management platforms and partnering with or buying data companies to devise their own audience segmentation schemes.
    If each media company sells a different audience, they ruin their ability to hold on to advertisers who can get the same audiences in digital at a great scale from Facebook and Google. Without the interest of advertisers, TV media companies will then lose the revenue they need to make great content and they’ll be defeated.

    It is in the MVPD’s and programmers best interest to share a massive common audience. The first step to doing this is to agree on a set of standard metrics. Today, TV has well-established standards. Nielsen ratings dominate. It is imperative that TV companies bring the same level of common standards to advanced TV. The media buyers who want advanced TV placements are more desperate for scale than they are for creative audience details right now. Rather than going deep, TV companies need to go broad. A cooperative pool of audience data that relies on a few key aspects like demographics and browsing history will more than suffice as long as advertisers can get as big of a reach as they can on the digital giants.

    Once these companies can agree on definitions, they need to actively connect their sales processes to enable cross-company audience-targeted media buys that are as technically streamlined as any offering from Facebook or Google. Today on linear TV, shared media buying happens all the time. TV companies act like a coalition, taking first dibs at a media buy, but sending excess to competitors after they take a cut. This same model has to be put together on new digital TV channels like VOD and addressable TV.  Not only would TV companies be able to preserve their lock on premium advertising dollars, they’d be able to protect themselves against Facebook and Google. And that’s not all, the inevitable rise of the new digital giants might not be household names today, but they will be in the next five or ten years as TV media goes digital. If TV companies don’t act fast, they’re sure to follow the same path as print companies before them.

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