TV cake baking vs lemon squeezing

Dominic Mills assesses the strategies broadcasters must deploy to thwart a host of threats. Plus: Can WPP unveil a showstopper?

As if Brexit-induced advertiser uncertainty wasn’t enough of a problem for UK broadcasters, as acknowledged at last week’s Mediatel Future of TV Advertising event by ITV boss Dame Carolyn McCall, the arrows of misfortune continue to come TV’s way.

Next up, gambling restrictions during live sports and, further down the line, the possibility of more curbs on HFSS products. And that’s before you even get to the duopoly and others trying to nick TV budgets.

To combat this, broadcasters have two options. They can make the cake bigger, by bringing in new advertisers. Addressable is part of this insofar as it addresses the long tail, but so too is the drive to pull in – with some success, it must be said – digital and nascent direct-to-consumer brands.

The second route (and I apologise for mixing the analogies here, but I just can’t make the cake one work across both) is to squeeze the lemon harder: in other words, get more money from existing advertisers by persuading them to pay more. And let’s be clear – these are not mutually exclusive.

Yes, addressable fits in here too as a lemon-squeeze option for proven advertisers, but it is not a silver bullet for broadcasters. For some it is currently too expensive, others may just cannibalise their TV budgets, and in any case, if broadcasters go too far down the addressable route, they risk damaging their strongest card: mass, instant, reach.

So where is that sweet spot where broadcasters can get advertisers to pay more without sacrificing mass reach? If you look at NBCUniversal and Channel 4, both of which are progressing in this direction on parallel routes, it is in the application of relevant context.

I confess there are times I find the (over)use of the word ‘context’ bewildering. It’s become a term laden with meaning – increasingly meaning different things to different people unfortunately. Once it was simple, broadly meaning editorial context. Now it is also extraneous, covering everything from location to weather to time of day and, for some, perceived consumer mood. [advert position=”left”]

The two broadcaster initiatives are essentially taking context back to its original meaning, in this case with the use of AI to assess context on a variety of axes and at scale in such a way as to offer advertisers extra impact – significantly beyond the ‘let’s-show-a-holiday-ad-during-a-travel-show’ thinking that used to pass for contextualisation.

You can read about the NBCU one here, and some early stuff on C4’s Contextual Moments platform here.

The C4 one has moved on, with a test with four advertisers concluding just a few weeks ago and more news, it is indicated, to come in January or February.

How does it all work? Some of it’s a bit sciency but simplifying drastically, the C4 data science team runs video and scripts through a giant grinding machine to identify positive contextual opportunities – anything from food, alcohol, mobile phones, holidays, fashion…you name it, the possibilities are endless.

These moments provide semantic priming, meaning viewers’ neuro-networks relating to those product areas are thus activated and therefore receptive to relevant commercial messages.

So far, C4 says, the evidence is that it works, with test advertisers seeing good increases in recall (doubled on average), positive brand perceptions and consideration. There’s more here on C4’s website.

Clearly, we’re just at the beginning of the process, but it seems clear to me that in this area C4 has a march on its rivals, although NBCU could make its tech available to Sky. But unlike other areas such as addressability, this is not one where C4 would have any interest in sharing its IP.

The potential is significant: areas like colour, sound and mood could be brought to play, while C4 could also create bespoke categories for individual advertisers, perhaps also linking to specific creative.

And there are other issues to explore too: recency, for example. How long is the contextual window of opportunity open, or by what rate does semantic priming decay? If it is short, this may restrict the product’s scaleability.

But is undeniably fresh and exciting for advertisers and, providing broadcasters can the squeeze the lemon, a rich opportunity.

Let’s hope, to borrow a phrase from a North American, “the juice is worth the squeeze”.

WPP cake baking

Tomorrow (December 11) sees the much-awaited WPP shareholder update on Mark Read’s plan to put some much-needed fizz into the beleaguered holding company.

As an aside, coinciding with the big Brexit vote (which at the time of writing might be delayed), this seems as good a day as any to out bad news.

And the bias is surely likely to be towards bad news, certainly for staff. Think of this as a Christmas stocking. For staff, the likelihood is that the goodies inside, if indeed there are any, will be pretty tawdry. Analysts are expecting job cuts, which could be compounded if there are more mergers of the VML/Y&R and Wunderman Thompson variety. Either way, more work, less resources, and a ratcheting of the pressure to make the numbers.

In reverse, shareholders (yes, including me) and markets may see such moves positively, as a sign that Read is getting to grips with an unfocused proposition and a bloated structure.

But what really matters is, and it is with relief that I return to this week’s main metaphor, is the cake baking. At some point, even if Read continues to shrink WPP in the immediate future, he’s got to find the, er, self-raising flour. If investors can’t see a bigger, better cake going into the oven (no soggy bottom jokes, please), they will take their frustrations out.

So far though, this vision of a bigger cake has been entirely lacking. Indeed, most of the activity, forcing agencies together, has been of the lemon-squeezing variety.

At some point – perhaps now – Read needs to unveil his showstopper bake.

P.S. And that’s it for baking analogies – for this year, anyway.