Podcast: A Conversation with SMI CEO James Fennessy

With the media world reliant on data, strong analytics become the key to actionable insights.  Hear how Standard Media Index (SMI) does that for TV networks to Wall Street fund managers, and what their Global Chief Executive Officer, James Fennessy, projects for TV and Digital advertising this year.  For Episode 16 of Insider InSites, I asked MediaVillage data/research reporter Charlene Weisler to join me in-studio for a conversation with SMI about their process for aggregating spending data from agencies and prognostications for the industry.  The transcript below has been edited for clarity and length.  Listen to the complete interview here .

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E.B. Moss:  How is SMI unique? 

James Fennessy:  Standard Media Index was founded in Australia nine years ago [by Sue Fennessy, who ran marketing agencies, and Jane Schulze, former media editor for News Corp Australia]  based on a "give to get" model of data consortium.  Agencies were having trouble getting at their own data and thus reporting problems with clients.  So, the idea was for SMI to work with their data to normalize it, standardize it and structure it, so they could report faster and more accurately ... and then get access to that aggregated data.

Charlene Weisler:  How do you get your data?

Fennessy:  We get data every week from the agencies via an AWS environment and take automated extracts from all of their invoices across TV, digital, radio, print and out-of-home.

Moss:  What companies work with SMI?

Fennessy:  Our partners include big holding groups like Omnicom, Publicis, Dentsu Aegis Network, Havas, Horizon … and leading independents like MDC Partners, RPA and others, and organizations in the marketing effectiveness and measurement space, like Accenture and McKinsey & Co.

Weisler:  Does your data also help Wall Street?

Fennessy:  We have about 15 hedge fund clients in the US -- particularly those who invest directly in media stocks -- because they get to see the advertising revenue of major media companies, which could be a Google, a Facebook, a Snap … before those companies report.  They have successfully modeled our data for a competitive edge around how those companies are going to perform in their next earnings period.

Moss:  Let's talk about trust ... 

Fennessy:  We've got very strict privacy protocols.  We never see the agency clients spend.  We take it at the category level.

Weisler:  How do others work with SMI?

Fennessy:  Our big relationships are with the national TV networks ... across pricing/planning/inventory management.  [We] can help them size the entire marketplace and understand their position and the flow of dollars.  We just launched a major ROI research piece with Fox Network Group. There are very good services -- the Kantars, the iSpots -- but unfortunately cost data has been 50 or 60 percent off.  We fixed that problem.

Weisler:  What percentage of the U.S. and the world's advertising spending do you track?

Fennessy:  We have about two-thirds of all U.S. national TV market invoices ... about 50 percent of all premium digital invoices (excluding Google search part) … about a third of the market in print and out-of-home, and about 40% of national radio.  In other markets around the world we have between 50 and 60 percent of ad spend.

Weisler:  What trends are driving the advertising market?

Fennessy:  [See Fennessy's detailed summary here.]  Cable news continues to be on fire.  In the first couple of months 2018 it was up 13 percent. We continue to see real strength in sports; the Super Bowl was up 3.4 percentage points [and] the Winter Olympics were up more than 10 percent over the 2014 Games.  The NFL regular season was down about six percent, but the playoffs were up about 1.5 percent.  We've also seen real strength in tentpole events like the Grammys.

Weisler:  What areas are not really doing that well?

Fennessy:  Late night programming on broadcast is down 15 percent for the year, but late-night comedy on cable is doing much better.

Weisler:  When does the drop in TV ratings impact pricing?

Fennessy:  The ROI studies show national TV in particular is [still] a powerhouse for return on ad expenditure.  The massive problems that digital is having [with brand safety and security] are playing right into the hands of TV networks.  So, we expect a strong Upfront.

Weisler:  SMI reported digital grew double digits last year, but there's been a lot of talk about pulling back data.

Fennessy:  Digital has probably been overbought.  As advertisers have taken more money out of TV and put it into digital, their market share has actually dropped.  Now they're starting to put it back into national TV and there's a direct correlation to an increase in sales.  But I think you do have to have the right mix.  The ARF says an ideal mix is about 82 percent TV and 18 percent digital ... and they work well in tandem, reinforcing each other.

Weisler:  What are the biggest trends in digital and TV for the next couple of years?

Fennessy:  In digital it has to be around privacy and security.  On the TV side we'll continue to see innovation … less ads, but much more expensive ads; advanced targeting; different types of creative like the six second ad; high-quality drama programming, and a real focus on live events.

Photo at top: (Left to right) E.B. Moss, Charlene Weisler, James Fennessy

Tracking Sales Across the Media Ecosystem: Q&A with SMI’s James Fennessy

James Fennessy started his career in sales at News Corporation in both Australia and Asia before launching his own sales consultancy that worked with leading multinational companies across Asia Pacific. His move to SMI in 2011 was fortuitous. He explains, “I found myself in the SMI business following a hard to resist invitation from the founder and CEO of the business, my wife, Sue Fennessy. We made the move from Sydney to New York just under five years ago.”

In this interview, Fennessy talks about SMI data and how it is used to help in integrated sales and marketing and how the television market is changing with the impact of digital. He also looks ahead to see how the media environment will change in the next three to five years.  

CW: Tell me about your current company and the job you do there.

JF: I am SMI’s Chief Commercial Officer and I have two key areas of focus. The first is responsibility for our agency partner relationships at a holding group level. The second is to work with our teams in local markets to successful commercialize our data through an integrated sales and marketing strategy that drives uptake from media owners, the finance community and brands. We have a terrific team that helps me execute and my job is to get people the tools they need to deliver outstanding results for our clients wherever they are in the world.

CW: Please describe your company's data offerings that are in use in the television sector. Please include whether you own your own data and/or aggregate datasets.

JF: SMI aggregates data from the world’s leading media buying groups. We structure and harmonize data for them in 22 global markets and our product is the aggregated view of ad spending in each of these markets. SMI delivers a real view of the health of the media sector and pinpoints exactly where advertising spend is flowing every month by sector and media owner. SMI’s proprietary data collection

methodology captures more than 80% of total agency spend, offering timely, unparalleled visibility

into market dynamics. This data is highly accurate as it comes directly from the booking systems of the agencies and so is much more valuable than current services that rely on rate card or estimates. It is released on the 15th day of each month for the previous month and covers every media outlet an agency books spend with. This includes television, digital, print, radio and out of home. Our television data is broken out at the network level and we now have great visibility into video and can see how the major networks are successfully monetizing their content on their new digital platforms.

CW: What is the ad spend trend for traditional television.

JF: Traditional TV is definitely under pressure from digital media and a measurement system that cannot keep up with the changes in viewer behavior. SMI’s data shows that national television has dropped by 4% this broadcast year but this has started to turn around in recent months and, alongside this development, video is really growing rapidly. We think that too much spend shifted out of TV too quickly and this has started to come back as brands realize what a unique and powerful medium TV is.

CW: Do you see traditional television eroding against digital?

JF: There is no doubt that changing consumer behavior will result in a vastly different ecosystem in the coming years, but it is important to remember that content is still king and the leading broadcast and cable networks have better content than anyone. We are seeing eyeballs shift but many of these will be onto the digital properties created by today’s leading networks. Video spend is through the roof and a lot of this is going to those traditional media owners who are successfully making this transition.

CW: Does your company have an overall data initiative to market and integrate your data into television analytics? If so what is it?

JF: SMI’s data is frequently combined with other data sets to create compelling insights that can help media owners and agencies do a really effective job of justifying their recommendations to advertisers. Clients are combining SMI data with ratings data and brand level occurrences to draw far more accurate insights than are available today through existing services.

CW: What types of clients use your data? Please include specific clients if that is allowable under your agreement with them.

JF: We are providing media owners and the finance community with a real and timely data set that delivers complete transparency on the total ad market. Our clients include many of the largest media owners in the country who want fast, actual data that helps them track share and growth, identify potential targets and get a better understanding of pricing. We are also the only place that you get all linear and nonlinear media in one consolidated view. SMI’s finance clients invest heavily in the media sector and need better data on advertising revenue.

CW: What are your data attributes for use in television? What can your data do?

JF: Our TV data is at network, daypart, advertiser category level and can be broken out by upfront and scatter. Our clients can obtain further insights by looking at program types such as sports, entertainment and news. They are able to monitor real-time competitive performance to maximize revenue opportunities. In the media sector, we are working with both the buy and sell side to create far more accurate tools that are fed by real cost data, enabling much better planning and justification for a greater share of a client’s ad dollars.

CW: What are some of the challenges you see in the television measurement world today? How can these challenges be solved?

JF: The biggest and most obvious challenge that we see is the 35 to 40% of TV audiences that aren’t measured by traditional services. We get 100% of ad spend from our agency partners but if our clients cannot match this up accurately against audiences then benchmarking and optimization become very difficult. Another challenge is that there is also a lot of digital spend going through networks and exchanges and these dollars are currently hard to track. Working with the middle men and getting access to their data will provide everyone in the ecosystem with higher quality data that will help advertisers and agencies make better decisions that lead to better consumer engagement and improved financial outcomes.

CW: What do you see as the future potential for your data to be used in creating a standardize-able measurement for the industry?

JF: Accurate spend level data is the cornerstone of so many tools being built today by both buyers and sellers of advertising. Without it, the tools just don’t work and campaigns cannot be properly measured and spend can’t be justified. Our goal is to become the leading global source for real and timely advertising expenditure data which will enable our agency partners and media clients to move higher up the value chain and assist them in delivering outstanding outcomes for their clients.

This article first appeared in www.MediaBizBloggers.com