Is It Now or Never For Advanced TV?

Changes in the media ecosystem didn’t start with the pandemic. In fact, some aspects of media buying and selling have been in discussion since the 1990s including Advanced advertising, according to Research futurist Bill Harvey, who has been touting the concept of advanced advertising since then.

Harvey participated in a recent Myers Collective Leadership conversation on the future of Advanced TV with a panel that included Kevin Arrix, Senior Vice President, Dish Media Sales, Jamie Power, Chief Operating Officer, Cadent, Marcien Jenckes, President of Advertising, Comcast and moderated by Jack Myers, Founder of MediaVillage.

The Addressable Market Landscape Today

Myers launched the panel with an opinion that I believe many of us share in the industry. “I have been studying the advanced, interactive, VOD, addressable market for a long time,” he began, “and truthfully, I’m not all that clear on who’s who and what’s what.” There is a litany of companies in the media space, who seem to offer opportunities that can overlap or conflict or split the market.  “Help me understand the dynamics,” he asked.

For Powers, one of the reasons that there might be some confusion is, “because we over complicate it.” In looking at the current set top box addressable marketplace with the MVPDs, she explained that there is, “Ampersand that has about 60% of the addressable households … then you have Dish and then Xandr,” which, combined, rounds out to the rest of the 40% of the country. She then noted that they have expanded to IP addressable to get their clients full reach in television. Cadent’s role is that they have, “created a platform to make it easy to execute across all the different screens and channels with consistent workflows and universal data, to get measurement aggregated all in one place” she stated.

“It’s worth noting,” added Arrix, “Advanced television is a holistic category. I would define it as anything that is data driven. I think Addressable is a part of the Advanced television marketplace. From my point of view addressable is defined as deterministic. That is the line that makes something addressable or not.” Ampersand, Dish and Xandr all have deterministic, set top box data, he noted, adding Sling, ATT TV Now, YouTube TV, Google Live and Fubo TV that are also subscriber based MVPDs.

Jenckes believes that the competitive set within advanced television is complementary because, “different distributors reach different households. So in order to reach the full US market you have to figure out ways to work across them.” He agreed with Arrix that, “there are other new forms of distribution that are emerging, like Roku which is a virtual distributor in some sense and there are others with addressable capabilities out there.” He added that once the national networks are enabled, we should expect significant growth in the amount of addressable inventory available in the marketplace.

“I agree with everything that has been said. Addressable is the umbrella term and the one type we have not called out yet is data-driven linear,” explained Harvey who added, “All of this is aimed at better results for advertising. That’s the whole point.” For Harvey, the topology maps out as such: MVPD addressability through a switch from the set top box and the Connected TV which can be a Smart TV or a connected device. The challenge from a data standpoint (which is something Nielsen and Project OAR is tackling) is how to best combine different data streams (such as from a smart TV in a local household or from terrestrial and satellite sources) that may have different latencies, delay times and black screens.

The Addressable Market Marketplace

So where is addressable headed? Forrester predicted in 2000 that addressable advanced television would be a $30billion industry in 2020. “Well here we are in 2020,” Myers noted, “and it’s significantly less. It’s a fraction of that.” He added that, “our forecasts are that in 2025 it will represent about 8-10% of the television ad revenues which will be significant growth but not the $30billion that Forrester recommended we would have today.“ Considering how off predictions were in 2000, one could be forgiven for being a bit skeptical about the robustness of addressable revenue growth in the next few years.

And yet, Jenckes believes that the biggest barrier to addressable growth – the technological challenge of switching from programming to ads - has now essentially been solved. But, he added, “the limitations we are having right now are around the amount of inventory we have available,” which is the two minutes an hour for addressable but even then, this inventory is often used in other ways. “So the challenge is how you improve inventory and how you manage yield. You can sell the inventory in a lot of different ways. I can sell a full spot at a set CPM or a much narrower sliver of that spot for a higher CPM but as the owner of the inventory I have to figure out which is best and how I optimize the value of that.”

The final challenge, Jenckes added, “is measurement and the biggest issue around measurement has been the historical restrictions that Nielsen has imposed on us as an industry,” Addressable is easy to measure because it is impressions based. The challenge is to measure, “the under addressable part of the campaign. What happens to the rest of the spot? Since Nielsen is panel based, if one of the panelists happens to get a different ad it breaks the model because Nielsen doesn’t know if that is one impression or a lot of impressions represented by that one panelist. There is a lot of work that needs to happen on that front,” he concluded.” But,” he then added, “these hurdles have been coming down. There has been a lot of progress around standards, around enablement and even on the measurement front although I think that will be the last frontier.”

For Powers, “the opportunity of addressable has been around for years. But agencies haven’t done it because we haven’t invested in the ad tech,” to facilitate the consistent measurement across platforms and services. In addition, “as a marketplace we are not articulating what the value-proposition is. We are over-complicating it. Advertisers and agencies are not understanding it.” She advocates for the creation of standards and a common currency. "If we cannot even agree … it makes it really confusing and there is not trust in the marketplace to try it.”

According to Arrix, “The key to the future is all about interoperability. The technology is getting better, the process is getting better. There has been a significant amount of progress made in the last few years.” That, with the recognition by the industry that, “data-driven advertising is just smarter,” is leading the industry to a growth surge for addressable.

The Future of Addressable

Propelling a robust future for addressable is data and measurement. In the past, the industry was wedded to the Nielsen panel. “But,” as Harvey pointed out, “right now there is more data each individual party has. The data is now disaggregated into these silos and if we put them all together we have the measurement system of the future. We don’t need panels except for nuances like co-viewing projections and stuff like that. Eventually that goes away too.” He admonished the industry to, “work together. Not just say it like we used to do but actually do it.”

That is the underlying structure for the business. “The big money comes when we get the network inventory. The two minutes an hour is not going to make it a big business. The $30billion comes as soon as you start switching to network addressable,” Harvey concluded.

“It is at the beginning of the game,” Arrix noted. “We see two paths right now. There is the true addressable path where you are breaking up the linear spot into impressions and you end up having the 80/20 rule with the 20% as the target and the 80% is the underlying impressions that you have to figure out how to monetize. That is how we operate now in our addressable business. The other initiative is creative versioning where you are not breaking up the linear spot but you are using deterministic data to deliver the right creative to the right household.”

But the stakes are high and the future is not assured if we all can’t come together as an industry to create standards and work together. “My fear is that unless we do that, we will be relegated to … the weakest player within television,” Jenckes warned. “And if that’s the case, we can all start the clock right now for the full and predictive demise of TV folks have been talking about for a long time. The good news is that because of the progress we’ve had, I don’t think that is going happen. There is a path and it requires collaboration.”

When it comes to business during the pandemic, “is business a bit little softer than usual? Yeah. But I don’t think COVD has a major effect on this,” Powers stated, “The same problems that existed before COVID, exist now. One thing that has happened is that there are more eyeballs watching the television and we know that we will pass the threshold (of 50%) at the end of this year from linear to non-linear viewing. Data is the only thing that is going to win in this marketplace.”

This article first appeared in www.MediaVillage.com

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

Addressable Advertising Pushes the Television Evolution

The recent B&C Content Show dedicated a full half day to discussions regarding the advancements in addressable advertising, TV programmatic and transforming traditional advertising. But it was also a love song to STB data, segmentation, ROI data and analytics.

Addressable advertising is reaching scale according to Jaime Power of GroupM’s Mobi Media who said that the footprint is currently "42 million HH and expected to grow to 60 million HH" with a steady expansion from local into scatter and national outplays." But he cautioned that "addressable will not replace traditional TV because we need traditional TV for reach." I agree with Power to a point because I believe that traditional TV itself needs to evolve from a spots and dots sales model to segmentation and proof of ROI. Addressable may facilitate traditional TV’s evolution especially as addressability rolls out to a more nationalized  distribution and as television itself becomes more digital in the world of 100% smart TVs.

The Traditional TV Model is Changing
The television business has been undergoing stress and change. Sales are down across many networks and projections indicate that the trend could continue. When asked if Addressable can save the TV environment, Power replied that "TV has to evolve- it is unrecognizable compared to ten years ago. We need to understand the new landscape and find ways to measure it. Not all customers are the same. We need to need to get to the custom level and reach core segments. Like purchase data where we can locate not just households with a dog but households that buy a certain dog food. You need to prove you can steal share by honing in on people's viewing behavior. We are using STB data and working close with analytics teams."

Research and Analytics are Critical

Virtually every panel touched on the need for measurement, targeting, analytics and usable data sets as part of their company's addressable initiative. Ben Tatta of Cablevision explained that "Data analytics is a new thing for television. Now we are conducting forensics on the data, on exposure and on response. (we recognize the ) importance of first party data. For the first time advertisers can use their own customer file. Age and gender have been proxies. We now don't have to do modeling. We are literally counting Sales." Keith Kazerman of DirectTV fielded "over 500 campaigns this year where we go into deep analytics that are more than age and gender."

What is Big Data?
A panel on big data moderated by Barry Frey of the DPAA was tasked with defining big data. According to Chris Pizzurro of Canoe, "For us big data is about a ton of small data. We dig in and bring up insights from that. We measure each individual ad." Eric Schmitt of Allant had a slightly different view saying "We see big data and bigger data. Big data is 120 million TV households. Bigger data is activity data. We bring them together in a privacy safe way getting to audience based models across a range of platforms."

Sales Feels the Pressure

The pressures on the traditional TV sales model are coming from several angles. AMC’s Arlene Manos said that “TV advertising has to change. We didn't have the tools and weren't asked for the accountability but now we have accountability in digital and they want it in TV.” Mobi’s Seth Walters cast a more somber note explaining that “a clunky interface is part of the reason that viewers go OTT. Netflix is another reason. Roku is far easier to navigate and in some cases they are faster. Viewers can easily and quickly identify content that matters to them. What is the role of TV advertising once that occurs?” The sales solution? Brian Stempeck of The Trade Desk believes that it is “inevitable that TV will go programmatic.”

Despite all of the hand wringing I believe that traditional television has succeeded for over 60 years because it responds to change and continuously evolves. There has always been competition from other platforms from radio and print to digital devices. While we continue to grapple with how to evolve the business model in this changing environment, new successful solutions will be found. As Adam Lowy of Dish concluded,“Eventually we will get there. TV is the first screen.” I agree.

First published, in abbreviated form, on MediaBizBloggers.com