Is TV Currency Dead? Predictions From AOL Open Series

There is a lot of scuttle talk about the changing TV landscape from the advancement of TV Programmatic to the demise of dayparts, upfront and even our current currency. It made for a lively discussion at the recent AOL Open Series on Programmatic TV. The event featured a panel of media executives from across the spectrum including Dermot McCormack, President AOL Video and Studios, Jaime Power, Senior Partner at MODI Media, Dana Hayes Jr, Group Vice President of Global Partner Development for Acxiom and Dan Aversano, Senior Vice President, Client & Consumer Insights at Turner Broadcasting. The panel was moderated by Dan Ackerman, SVP, Programmatic TV at Adap.tv.

Programmatic TV is not what you think according to Ackerman.tv, who explained, ”Programmatic TV is here to stay. Sixty percent of brands will apply programmatic techniques to broadcast TV by 2016. But Programmatic TV is not RTB. It is not the way operates in digital space. It is data aggregation and accountability.”

I love panels that spark a bit of controversy and this one provided quite a few dissention points. Ackerman spoke about three areas of linear television disruption taking place today - in Content, Distribution and Monetization.  The one area that can bring a discussion to a boiling point is monetization. No one likes to have their planned and predictable bread and butter disrupted.

While Aversano believes that the time has come to transition from the current Nielsen currency, Power is not convinced. She said, “TV is traded on broad demographics. Now we are trading on consumer behaviors which is something that we could never do before in TV. But this is just a complement on traditional TV and not a replacement.” The discussion took off from there:

Power –“Nielsen is the currency. Until someone comes up with another way to measure television we stick with the current currency. The foreseeable future is Nielsen currency.”
Aversano – “I don't know if you need a standardized currency. Some say that is crazy talk but who are we to say to P&G that they use a certain measurement. We have to be okay with that.”
Power – “How do you scale without standards?”
Hayes – “We have deals today that are leveraging their CRM data, Rentrak, etc. it is a nightmare but…”
Ackerman – “Are you set up to trade in a non-currency environment?”
Power – “There is no way to trade at scale without a unified currency.”
Aversano – “People do it in digital today. We need a world class revenue management system to bring supply and demand together.”
Power – “Good luck to you guys.”
Hayes – “I have a Switzerland response. You can think about digital people based targeting for TV but there is too much money and too much risk today in TV. But smarter agencies and marketers are leveraging now for the future.”

While it is not easy today for television to shift to a digital model, this shift may occur in the future as larger and larger percentages of televisions in homes are connected. So, in my opinion, it is only a matter of time for the entire TV buy / sell model transitions to something more akin to what we see in digital… and even digital may evolve. Ackerman pointed out that even today, “every network group is developing their own audience and targeting products. They are having real business impacts and we are seeing shifts of guarantees.”

These shifts in guarantees underscore the real macro trends of supply and demand. Ackerman explained, “The reported TV ad impression growth is misleading. 40% of U.S. households have VOD subscriptions and there are many more programming choices. The impact is fragmentation. The core demo of TV is A18-49. It is the backbone of trade today but it is declining. It is not doom and gloom. It is transition. Adults 18-49 impressions are declining but ad inventory is increasing resulting in slight growth. There are more 15 second spots. So there is less content, more ads, more ad messages. There is an assault on value.”

No one has a lock on how the future will pan out. But if we look objectively at the state of TV we might see that further fragmentation and higher ad loads could spell the eventual end of business-as-usual. In a final stroke, Ackerman asked the panel for one prediction – what will be the biggest headline in the 2017-18 upfront? The answers - McCormack predicted, “Upfronts are dead.” Power said, “I disagree (that upfronts will be dead). Data will be more actionable. More driven.” Hayes believes, “Programmers that do better TV measurement will win.” And with the last word, Aversano predicted, “Day parts are dead. There will be new ways to structure inventory, driven by data and analytics.”

It will be interesting to see who is right next year at this time.

This article first appeared in www.MediaBizBloggers.com

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