Advertisers are tuning in to transparent TV
Despite industry reservations, AudienceScience’s Natalie Mazer argues that TV should embrace programmatic sooner rather than later.
The way we watch TV has changed beyond recognition. What was once a communal activity, with families viewing programmes in a linear fashion following the TV schedule, is increasingly becoming a non-linear, solo activity; more people watch what they want, when they want and where they want – and on the device of their own choosing, from smart TV to laptop, mobile phone and tablet.
According to a BARB-backed study into TV viewing earlier this year, while 86% of TV is watched on a TV set in the living room, 56% of viewers watch TV on screens other than the TV while in the living room, 46% watch in the bedroom, 24% used a mobile device in their study and 9% go mobile to watch TV in the bathroom or toilet!
37% in the same survey claimed to watch TV when out and about in a variety of environments such as on public transport, in the car or even waiting for the bus.
How we perceive TV has shifted massively too. Instead of having loyalty for particular TV channels, these days we probably don’t even know what channel we’re watching. We’re loyal to particular programmes and content.
With such momentous change, though, it’s interesting that one thing has stayed the same. TV may now be a fully digitised medium, but TV ad buying is stuck very much in analogue mode.
The majority of TV advertising is still pre-sold in large bundles at the beginning of the year. This is how networks have maintained high prices for their inventories, and how media agencies have made their margins and earned the big rebates that are part of the traditional TV buying model.
The progress of programmatic TV may be hampered by the unwillingness of TV networks to invest in the technology, infrastructure and hardware that will be needed to make it happen”
Targeting is also broad-brush-stroke, with planners buying according to the TV show the ad appears in, rather than the household that will be watching it. This creates a huge amount of wastage.
The success of ads is then measured according to the viewing habits of the small sample (5,100 households) on BARB’s TV panel, which provides little insight into who, within those households, has seen the ad.
This is pretty much how it has been for 60 years and there are many in the industry – particularly the TV networks and ad agencies – who are happy to see it stay this way. As Lindsey Clay, CEO of Thinkbox, said in a recent MediaTel Newsline article, there are a number of issues that make the move to programmatic TV less than a straightforward journey.
However, CMOs at large global advertisers are starting to question the status quo of TV ad buying. Especially digitally-savvy CMOs who have experienced how much programmatic buying has revolutionised their digital ad campaigns across display, video and mobile. They are telling us that they want to see the same control, transparency and effectiveness in their TV campaigns as they achieve across their other media channels.
That time is almost here, driven by advancements in technology, the take up of smart TVs and increased mobility creating continued growth in on-demand viewing – not to mention the demands of the advertiser to make their TV campaigns work smarter and harder.
They understand that their ads are not reflecting consumers’ ‘on demand’ behaviour; they lack relevance due to the addressability issue but also, in the case of linear TV, ads can be wasted not only on the wrong eyeballs, but on no eyeballs at all.
The progress of programmatic TV may be hampered by the unwillingness of TV networks to invest in the technology, infrastructure and hardware that will be needed to make it happen, especially when the outcome doesn’t appear to be in their interest. However, it is now a case of not ‘if’ but ‘when’ programmatic TV happens.
And when it does, it will be an exciting time for advertisers, bringing TV and the other digital channels into one holistic, connected and media neutral world. This will require a different kind of media planning based on audiences rather than content.
Advertisers will be happy to pay higher prices to reach more relevant audiences – potentially with target audiences being sold in bundles rather than shows.”
The advertiser will be able to select specific audience segments, such as male car-owners, aged 25-35, earning £50k+, without kids – and media buys will be delivered against individuals that fit this profile, using the appropriate ad format and messaging to reach the consumer depending on how and where they’re interacting.
Indeed, networks like Sky are making progress in the right direction for addressability. For example Sky’s AdSmart technology has already made it possible for advertisers to target audiences according to demographics and viewing habits, which is an exciting start. However, for programmatic TV to offer advertisers the same benefits they see across other channels, they need to demand two things.
Firstly, they need more connectivity as currently there is no ad serving system that runs across all the networks. Each has their own separate system and database and there is currently no means for sharing data. This limits programmatic’s potential significantly as there is no means to frequency cap or to measure the true reach of a campaign as there will be no way of eliminating double-counting.
Secondly, they need to own their own data – but this data is currently owned by the TV companies. However, it is only by having their own first party data and integrating this with third party data, that brands can get the kind of deep audience insights needed to segment and target audiences and optimise campaigns.
This is essential for advertisers to see who viewed their ad, where and how many times, and to respond to consumer behaviour – bringing campaign measurement in line with other digital channels.
TV will always play an important role for global advertisers, but research shows that budget is increasingly being distracted away to other, more accountable and measurable channels. This makes it the perfect time for advertisers to make these demands as there’s nothing like moving budget to get media owners to take notice.
For advertisers, the benefits will be a significantly more transparent TV buying ecosystem and much more effective media buying.
However, there are benefits for the TV networks too: advertisers will be happy to pay higher prices to reach more relevant audiences – potentially with target audiences being sold in bundles rather than shows. Also, programmatic is likely to make much more of the network’s lower value inventory saleable.
And finally, what about the most important person in media buying – the consumer? For them, TV viewing will be enhanced through personalisation and fine control over the number of times they can see a specific ad, to ensure relevance and great user experience.
It seems it’s time for programmes to get with the programmatic.
Natalie Mazer is VP strategy and development at AudienceScience.