Explaining the CPM Increase in Media. An Interview with SQAD’s Marc Krigsman

Marc Krigsman has a deep background in TV from Fox Cable Network to Turner Networks Group, Cadent and Cross MediaWorks to becoming CEO of SQAD in 2015. 

“I have seen and been involved with many significant changes and advancements in television advertising,” he explained. So who better to assess the strength, opportunities, trends and challenges in pricing the media marketplace in 2020?

Charlene Weisler: What data does SQAD collect and what do you report?

Marc Krigsman: For more than four decades, SQAD has served as the industry source for ad cost data, processing more than $1 trillion in real transaction ad costs from advertising housekeeping system. This data is available through our MediaCosts platform and includes costs for national broadcast, cable, and syndicated television, as well as local broadcast, cable, and Hispanic TV, radio, and out-of-home advertising. We also provide audience analytics research tools for Nielsen data through our MediaLogic platform and provide advertisers and agencies with the industry’s leading media planning software, MediaTools.  

Weisler: How has audience fragmentation due to streaming, OTT, SVOD and cord-cutting impacted average unit ad costs on broadcast and cable if at all? Where do you see the trend?

Krigsman: It’s an interesting conundrum that we are in right now because as fragmentation occurs and audiences become more scattered there is still a revenue target outlets need to achieve for their inventory. So what is actually occurring is a CPM increase. That is because it is costing more to reach the same audience. As fragmentation happens, we’re seeing CPMs and rates go up.  Most in the industry thought that would not be the case, but in fact we are seeing an increase in prices. That also happens when you sell less inventory - CPMs go up. It’s a supply and demand issue. Fragmentation does not equate to a sale or reduction in prices. It is actually the opposite.

Weisler: What will the effect of increased audience based buying and impression based measurement be on unit ad costs and on advertising budgets?

Krigsman: The more focused and targeted you get, the more you are going to pay for that targeting. For some advertisers that makes sense. They will pay a premium to reach the audience they want to reach and only that audience. But other advertisers, CPG for example, don’t really care about pinpointing audiences. So for them addressable is not as efficient a buy.

The reality is that even with targeting you are still going to have waste. You have to be 100 percent clear about who the audience is you want to reach. You have to have a lot of audiences in your data to understand who your ideal customer is but when you do that the extras it takes to buy those segments will result in a higher price point.

For the seller, an advertiser using a targeted campaign to reach a limited HH, that means that they will have to fill their other inventory with other types of advertising if they can. The media outlet has to have confidence that the revenue they are getting from the targeted buy will be enough. They have to take into consideration that if it goes for a lower price, this will open an opportunity for bargain hunters looking for a bucket of impressions, not specific ones. Targeted buying could create opportunities for people who are looking for the opposite.

Weisler: What are the programming types that continue to command the highest CPMs?

Krigsman: Live shows, special events, news and sports – these are premier events that always command high CPMs because of their unique selling proposition in general. Overall you still have huge prices for traditional TV– sitcoms and other first run programming. But clearly live and special events are unique.

Weisler: How are live programs such as sports and awards shows faring in an environment where audiences are gravitating to watching highlights on-line? Does the data support this assumption? Press seems to infer that live programming delivers the most engaged audiences. Do you agree?

Krigsman: Programming that promote itself as unique or “watch it now” has the specialness of motivating viewers to want to watch it while it is happening, which always makes for an engaged audience.

Weisler: What can we expect for the CPMs of news programming as the presidential campaign season heats up? And how will data be best used to target independent voters? How is the tight inventory in local markets due to campaign buying impacting CPMs for advertisers?

Krigsman: History has shown that when there is a lot of pressure on inventory prices go up. From a national inventory perspective there will be a lot of pressure from PACs and other entities looking to support various issues and candidates. But most presidential advertising will be local rather than national. This will put pressure on local inventory and we will see an increase in those markets, but for only for a period of time, What traditionally happens is that those markets will go through to a period of  time and some of their core advertisers may not have available to them what they have had before.  But those local stations will then look to make goods following this period to offer to their bread and butter advertisers.

Weisler: How would you rate the TV ad market overall as we head into 2020?

Krigsman: The market is pretty healthy.  We are seeing a lot of increased pressure from other platforms but overall the ad market is healthy. People have a high level of confidence in the economy and when they do marketers spend against that confidence…that will reflect well in the ad market moving forward.

This article first appeared in Mediapost.com

Championing Television Targeting Through the ATSG

Sometimes the best way to advance initiatives is to band together a group of frenemies and form a consortium. In the case of ATSG, (Advanced Target Standards Group), Discovery, ESPN, Fox, Turner and Viacom shared their expertise to accelerate the use of advanced targets in the buying and selling of TV advertising.

The group was formed in 2016 when data -driven linear deals were fairly new. At the time, “all the participants recognized that there was a need for standard approaches and consistency in defining and measuring advanced audiences,” explained Pete Doe, Chief Research Officer, clypd who also leads the ATSG. “Since then we’ve grown to include representation from more media owners, agencies and CIMM.”

Since their inception, the group has deliverables in the following areas –

• Guidelines to help buyers and sellers manage advanced audience deals and first party data.
• Calculation Principles ensuring consistent and transparent advanced audience definitions and calculations.
• Pre-defined Advanced Audience Definitions.
• Perspectives on data quality for advanced TV data sets and Attribution.

The need for such a group is evident when you compare linear TV to digital. “Linear inventory is finite while digital is effectively infinite, so that leads to very different demand and supply and monetization,” noted Doe. But another key difference is measurement where linear TV with its human-based panel is a counterpoint to digital which is device driven with inferences about humans being drawn from observed online activity and big data matching.

“Typically, the assumption is that a served digital ad is seen by one person, but with television, co-viewing is common. As OTT continues to grow, measurement needs to reflect that more than one person is watching the IP-delivered content on the big screen. The best of both worlds has to be a hybrid measurement of big data sources reflecting device activity, informed by representative panel measurements of people,” concluded Doe.

The next steps for ATSG are to expand their membership to include other parts of the media ecosystem while continuing to work on cross-platform target definition consistency and guidelines on the reliability of advanced audience campaign delivery.

This article first appeared in Cynopsis.

Advancing Cross Media Measurement. Takeaways from the CIMM Cross Platform Video Measurement and Data Summit

 

To those of us in the media world, the discussion of attribution and cross platform measurement has been going on for decades. Waiting for solutions has been painfully slow. But in the most recent CIMM Cross-Platform Video Measurement and Data Summit (now in its 8^th year) the big reveal was that not only has significant progress been made in attribution and cross platform measurement, feverish activity has been taking place behind the scenes for years. 

The reason is that it’s simply not easy to form new metrics and protocols between the need for consensus across all types of companies and the persistent evolution and expansion of technologies.

For Jane Clarke, CEO Managing Director of CIMM, 2018 was a year of significant advancements. At last year’s conference, CIMM announced a Measurement Manifesto to keep the industry focused on cross platform measurement. Her work on content labeling has been pivotal to stitching all pieces of video together across screens. This year Clarke announced the launch of TAXI Complete (Trackable Asset Cross Platform Identification) which is the creation of audio watermarks for content (EIDR) and ads (Ad-ID). It will, according to Clarke, “Advance cross platform video measurement and bring more measurement to TV.”

For me, the major takeaways were:

Ø  While content labeling gains traction, deduplication is pivotal to getting to a reliable and adoptable cross platform measurement currency.

If it can’t be measured it can’t be monetized and if it can’t be measured accurately, monetization will be flawed. Content labeling is continuing apace with more companies adopting the coding and the cost of entry to enroll has been lowered. One next step includes the advancement of deduplicated reach measurement to help accuracy. 

According to Beth Rockwood, Senior Vice President, Ad Sales Research, Turner, “Questions can be answered well with deduplicated reach. It’s an important tool and fits into context of marketing mix models and attribution.”

Ø  Measurement challenges will continue as we try to keep pace with evolving technologies and how consumers use them.

As Krishan Bhatia, Executive Vice President, Business Operations and Strategy, NBCU, noted, “The transformation of the consumption of video on a cross platform basis … has accelerated in the past 18-24 months. Devices are driving it (while) measurement has not caught up or stayed ahead of the curve.“

Evolving technologies such as voice assistants, “are making measurement more difficult,” Jack Smith, Chief Product Officer, Global Investment, GroupM pointed out. “It is happening in apps that are already walled gardens and operating systems are also intermediaries which can control pricing, ordering products and recommendations instead of having a direct relationship with the brand.” These, along with screens in self-driving cars, provide new viewing venues and experiences. As an industry we need to understand how it all works … and morphs over time. 

Ø  Privacy and Transparency need to be addressed. We can no longer kick the can down the road.

“Privacy and data issues will become more important,” stated to Laura Nathanson, Executive Vice President Revenue and Operations, Disney Advertising Sales. “Consumers will demand more privacy and more walls,” she added. But how privacy balances with transparency is still to be discussed. For others there is not enough transparency, at least when it comes to data labeling. 

To that end, part of the content labeling initiative includes  a data transparency label which points to aspects of the data and its collection such as how the data got created and where it came from. The careful balance between privacy and transparency, including the impact of GDPR in Europe on the U.S., require us to continue the discussion and create protocols. 

Ø  As an industry we need to work together to develop and establish adoptable measurements.

“We need to hit the pause button and up level the conversation,” stated Radha Subramanyam, Chief Research and Analytics Officer, CBS. She was referring to the clamor of competing voices around measurement today. “I love the innovation in measurement and the abundance of products and granular data,” she continued, “But are we any closer to making things make sense? My call is for a common sense framework. Stop the noise and see what we are really trying to solve for.”

This article first appeared in www.MediaVillage.com

 

Peering into the Media Crystal Ball at The TV of Tomorrow Conference

Every December in New York, we are given an opportunity to map out the future developments in media at the TV of Tomorrow conference. This year, Tracy Swedlow, co-founder and CEO, TMRW Corp., focused the event on hot topics such as Attribution, Addressable Advertising and Data and how these three impact content creation and sales.

Here are the major takeaways:

Addressable Advertising Advances

“Traditional TV was a one-to-many ad medium where all would see the same ad,” explained Brett Hurwitz, Business Lead, Advanced TV, Oath. ”Addressable is not the case. It delivers a direct ad to the most relevant individuals. It is individualized advertising,” he added.

According to Amy Leifer, Vice President Sales Planning and Operations, Xandr, there is huge potential in addressable. “When you use data to attract audiences, it is more meaningful. Outcomes are so much better than using blunt media,” she stated, and added, “The reality is that it works regardless of whatever vertical you use. And it continues to grow because it works.” Xandr, AT&T’s new advertising division, launched their addressable product seven years ago.

Competing companies, such as AT&T and Dish, are now partnering on certain addressable initiatives, such as the political advertising marketplace, where they need scale and reach. “They are a competitor but we are combining our audiences in certain markets. We have an office in Washington DC that is dedicated to that marketplace,” Leifer noted.

Desirable niche targets sometimes pose a risk in addressable. We need to monitor, “which households are seeing any given ad far too many times,” advised Kevin Arrix, Senior Vice President of Dish Media. “It is difficult to control because sequencing is sold by certain groups.”

Understand How to Leverage Content

Karen Leever, President, US Digital Products, Discovery, understands the importance of content format in attracting the right consumer on the right platform. “Consumers deserve ubiquity of content and we need to give them reasons to come back,” she explained. Discovery offers full seasons on demand and, with key tent pole shows like Shark Week, the company strives to “go deeper on those for super fans” by offering short form content on the event, 8-15 minutes in length that they especially enjoy.

Leever measures the success with number of streams and minutes watched which she examines every day for both long and short form programs. In addition, Discovery has a social media initiative and has developed a robust social media community. “We have 300 million social media fans,” she noted. Discovery partners with such companies as Group 9, Dodo and Seeker which helps age down their linear TV demographic. But this effort is only used to build awareness. “There is not a lot of access to  programming over social media. Viewers must go to the provider,” she explained.

While Discovery seeks to own their content, Google sources news rather than creates it, according to Rebekah Dopp, Principal, News and Local Media Global Partnerships, Google. And thre are no plans at this time to go beyond aggregating. “It is not our core competency, not in our DNA,” she explained. “We are not content creators but a platform. And we do all we can do to maintain integrity of those who provide content.”

Attribution is Hitting Its Stride

Media companies and agencies are focusing more and more on attribution. “Attribution is a super-hot topic,” according to Tracy Swedlow, co-founder and CEO, TMRW Corp, the parent company of TV of Tomorrow. 

For agencies, it is important to manage for frequency and understand targets that are applied to linear space, according to Helen Katz, SVP, Global Director of Data and Contract, Publicis Spine. Creative has been a bigger challenge, she noted, because there isn’t always multi versions of creative that can be used for targeting. “We are in a learning curve,” she stated. But it is possible to measure success. Katz has seen sellers guarantee against the outcome in addition to the grps. And yes, “they have to hit both guarantees,” she added.

Media companies have to create their own benchmarks in this new and emerging space because there is little history to rely upon. “We update our guidelines every year,” Katz said

Data Continues to Rule

Donna Speciale, President of Turner Ad Sales, is a big proponent of data to help sales maximize the value of their inventory. Their work with AT&T’s Xandr has been formalized this past June and now they are working closely, collaborating and gathering data to enhance their current products. Xandr offers Turner access to AT&T first party data for 25 million set top boxes and 147 million mobile devices. “Our goals is to enhance our audience products,” Speciale noted, “making them faster. Our goal is to have real time optimization so we can post a lot quicker and cleaner.”

Speciale is hoping to get to national addressable. “But we are not there yet,” she admitted. “To me, it would have to get to at least a 50% mark for it to be a viable option. It is hard for us to do anything of that size because anything that deviates in a national footprint for C3, we won't get credit for. Nielsen needs one marketer for a national unit.” If ads are split between two different advertisers, Turner would lose that national rating for that telecast.

But in the meantime, Turner is doing beta testing to make the data actionable within audience segments. Speciale expects to announce new products by 2Q 2019. She also plans on being able to do her own attribution instead of going to third party sources. “We’ve got to get out of the demo and into audiences,” she stated.

This article first appeared in www.MediaVillage.com

The Coup D’etat in Media. Insights From the TV Data Summit

There has been a coup d’etat in media. Where Content used to be King, it has now been deposed and replaced by what Eric Shenk, Technical Director, Office of the CTO, Google Cloud Media noted at the recent TV Data Summit - “Audience is King.”

Why have audiences taken over the prime consideration in media? Part of the answer is the primacy of data in the consumer journey. With access to first, second and third party datasets, marketers and programmers can more easily and efficiently parse who is motivated, who is engaged and who is ready to transact. But how can we know which datasets are relevant, what might be missing and how to best analyze the results?

Here are some takeaways from the TV Data Summit:

The Impact of Data

The availability of data has led to a seismic philosophical change in the media pipeline. The focus used to be on delivering audiences to advertisers. But now, with audiences more in control of their viewing choices, companies need to consider what triggers their choice and attention.

For Radha Subramanyam, Chief Research and Analytics Officer, CBS, her company’s world class global content, brand championship in a safe environment with a passion for innovation is all tied together with cutting edge analytics supported by data. In looking at the ad marketplace today, she noted that data can be used by targeting demographics to gain mass reach and brand awareness, from data enabled TV to target optimization and in addressable for one to one messaging.

For Shenk, “Data is everything,” touching all aspects of the media business. But, currently, it is highly fragmented, residing in silos within companies and behind walled gardens with frenemy companies.  As best as one can, data needs to be collected, transformed, analyzed, visualized and then the best decisions must be made from the insights.

Consumers Are in Charge

Larry Allen, Vice President Ad Innovation and Programmatic, Turner, noted the shift in focus from the client to the consumer. “TV is under siege,” he warned, and said that while advertising strives to make the experience better for the client, “what if it is alienating the consumer?”  We need to “put them front and center.”

He explained that the current ad model is not working because there is too much frequency, not enough relevancy and too mass. “Really long ads can work depending what you are trying to achieve,” he noted and added, “We have new customer engagement metrics to improve our understanding of what is happening. We want to put ads in front of people that make sense. So they don't avoid them.” To that end, Turner embarked on consumer journey research to find out what builds affinity for content. Turner identified consumer content needs and the path they took to make decisions. “This can make things more contextually relevant in real time,” he stated, “and it can be leveraged. But it is hard to scale today and it is a long term horizon project.”

The Challenge of Measurement

The wide possibilities that data brings to the media business is offset by some of the challenges it creates. “Measurement to business outcomes has been challenging,” admitted Julie DeTraglia, Head of Research, Hulu. Tracking content across screens, calculating co-viewing on shared platforms and establishing an industry standard cross platform measurement are all worthy goals that require a joint industry effort between companies that often compete.

CIMM, now part of the ARF, has been focused on establishing a universal content labeling code to ads and programming. This initiative is beginning to gain traction. Jane Clarke, Managing Director and CEO, CIMM noted that there is, “a lot of support for data but sometimes data produces different results because there is no national dataset. We need to understand what is under the hood.”

Initiatives like OpenAP have enabled frenemy companies to work together to bind datasets together to segment audiences for sales.  For Haile Owusu, Senior Vice President, Analytics, Decisions and Data Sciences at Turner, the focus is on algorithmic output. “We forecast bulk audience flows and the ability to probe intra-show behavior, identifying components of the content for additional churn,” he explained. He is also working on the blending of linear and digital consumption by coupling Iinear TV viewing with viewing on devices and to messaging on the app.

Conclusion

Data and analytics, fueled by machine learning and artificial intelligence, will make the media business more efficient and targeted. If frenemy companies can work together, the opportunities offered by data will multiply and the challenges it presents will be subtracted. The TV Data Summit has put all of the innovative approaches out there. Now is the time for the industry to move forward.

This article first appeared in www.MediaVillage.com