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

The Best of Charlene Weisler in MediaVillage

I am thrilled to see a "Best Of" email blast of my top articles in MediaVillage from 2019.

Featured Commentaries from MediaVillage.com

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Getting Deep into Sports Data-Driven Advertising Opportunities with Xandr and WarnerMedia

For some, according to consultant Mike Shields, when you think of sports advertising it’s generally, “big brands doing tent pole sponsorships. Sports doesn’t scream data technology and programmatic.” But for others, data-driven Moneyball for teams and athletes has made the jump to data-driven addressable advertising in sports programming. At the recent TV of Tomorrow conference, Shields sat down with Laurie Shackell, Vice President of Sports Advanced Advertising, WarnerMedia, and Brian Cordes, Vice President Head of Strategic Partnerships, Xandr to discuss the use of data in the sports programming arena.

Changes in the Sports Marketplace

Generally speaking, at least for marquee events, the sports advertising business hasn’t changed much in the past few years. Shackell offered that, “most of the clients we talk to in the sports landscape don’t want to give up national GRPs which are very precious,” especially for big events like the SuperBowl, All Star Game or NCAA Tournament. “And we are not suggesting changing that.” She also noted that overall consumption of sports programming has continued to grow across all of the different platforms. So within this rich and growing market, the recent merger of Time Warner with AT&T’s WarnerMedia and Xander, perfectly positioned to capture the full value of sports across platforms and all of the buying mechanisms for both national and local campaigns.  

New Forms of Advertising

Sports programming usage by fans is increasingly fragmenting, while becoming even more engaging, if that is possible. Shields noted that, “Bite sized consumption and social media are such a huge part of it [sports programming] now. I imagine that it is more complicated,” in creating media campaigns. But Shackell sees added opportunity rather than complication. “The Bleacher Report always says that the moment is born on TV but … now we can take those moments whether its online or even onsite at a fan fest,” and add the excitement and engagement of those moments to a measureable campaign.

One-to-one targeting is, “another distribution point,” explained Cordes, where Xandr is able to pinpoint a specific athlete’s fan and match messaging to purchasing behavior via addressable on TV or cross screen addressable programmatic. “So it’s by extending that distribution point across a more amplified sponsorship role,” he added.

Finding the Right Creative

“One of the questions we get in addressable TV all of the time is, ‘okay I get it, I want to use the targeting and I want the efficiency it brings but what content do I use?’ and 95% of what we see is people using traditional TV spots, the same spot they use in national linear and bringing it to addressable,” explained Cordes, to add frequency to those households most likely to convert. “But advertisers will always yearn for better and more relevant content and it was always so expensive to make another 30 second spot. So the idea is to take the content that is already being built and leverage these other distribution points, like addressable TV, along with what they are already purchasing from a sports perspective. It’s where we see a big potential for the future.”

Between the ability to leverage multiple platforms and adaptable creative for both national and local campaigns, today’s sports advertising marketplace is flexible, effective and growing. “We’ve also stumbled upon a new idea,” added Cordes, “around frequency management and impression distribution,” where it is possible to reach all potential populations for a brand via addressable from heavy to very light viewers of TV, overcoming some of the challenges of linear. That, and enabling direct-to-consumer advertisers to enter the TV space, indicates growth potential across all verticals and types of advertisers. 

This article first appeared in www.MediaVillage.com

How Clypd Accelerates Xandr's Position in Advanced TV

Demonstrating its commitment to TV advertising, Xandr acquired clypd, a data-driven sell-side TV platform of choice for more than 100 broadcast and cable networks that also boasts both a private and an open marketplace.  Clypd will complement Xandr’s recent product launches, including Xandr Monetize and its premium marketplace, Community.  This will help accelerate converged buying across addressable, digital, data-driven linear and OTT.

The clypd acquisition allows Xandr to significantly expand its inventory for Community through a new agreement with SpotX, which will act as its exclusive third-party supply-side platform for 2020.  The move will permit advertisers working with Community to tap directly into the SpotX platform.
The net result of this acquisition is that clypd adds broadcast and cable TV network inventory tracking to Xandr's digital and addressable footprint, effectively enabling greater convergence of cross-platform media.

Synergies and Connections
Clypd integrated Nielsen television ratings data into its platform in 2016.  There were two key benefits: Agencies could execute on custom audience segmentations and clypd could scale and streamline advanced TV audience contracts through the full lifecycle of a TV buy.

Now, with clypd's integration into Xandr's platform, there will be greater convergence within the full sales cycle between addressable TV, data-driven linear TV, mobile and over-the-top channels on streaming video services.  This will also streamline messaging to consumers to ensure that they are receiving relevant, seamless and, therefore, more compelling advertising.  This is in addition to Xandr's own first-party viewership insights.

This all feeds nicely into Community's premium marketplace, which is powered by Xandr, and includes inventory from a range of top networks: WarnerMedia's CNN, TNT, TBS, truTV, B/R Live, Otter Media and Warner Bros., as well as A+E Networks, AMC Networks, Bloomberg, Cheddar, Vudu, VICE, Hearst Magazines, Newsy, Philo, Tubi and Xumo.  Marketers can use clypd's self-serve platform to define campaign targets, discover available inventory and measure campaign performance, which will complement Xandr Monetize on the publisher side.

Expansion and Authority
In its purchase of clypd, Xandr also gets the brain trust that has been focused on data-driven buying and selling for years.  Chief relationship officer Mark Mitchell, for example, has been building relationships with TV networks.  "When we started clypd, a ton of effort went into convincing sales leaders that the industry needed to begin to change," Mitchell says.  "We're now at the point where everyone sees the benefit of selling advanced audiences and market adoption is underway."

Chief research officer Pete Doe, in addition to his work at clypd, also chairs the ATSG (Advanced Target Standards Group), a consortium of TV networks, agencies and organizations that share their expertise to accelerate the use of advanced targets in the buying and selling of TV advertising.  The group forms guidelines to help buyers and sellers manage advanced audience deals and first-party data, and has established a set of calculation principles.  This ensures consistent and transparent advanced audience protocols, establishes advanced audience definitions and offers perspectives on data quality for advanced TV data sets and attribution.

Brands, agencies and media companies alike have to be agile to keep pace with emerging media trends today.  Xandr's acquisition of clypd not only helps to keep Xandr nimble, but it also enables the company to better consolidate its marketplace strengths for the future, whether through data, improving the buy/sell cycle, or contributing insight on industry guidelines.  Stay tuned for what's next.

This article first appeared in www.MediaVillage.com