Both traditional and digital buyers recognize the power and value of TV advertising. This full-screen, nonskippable, sight-and-sound format delivers performance for both brand and direct response advertisers alike. What’s most exciting to those same buyers is that increased availability of viewing data and addressable screens will soon support even more focused buying across premium video sources. At the same time, personalized content and the experience of impression-based digital advertising have reset buyer expectations and opened the market to a substantial number of new-to-TV advertisers.
Here are three ways TV publishers and broadcasters should be thinking about these shifting dynamics to capitalize on new monetization opportunities.
Sell More Ads
An obvious way to grow revenue is by increasing the volume of impressions monetized. This can be achieved by increasing the amount of impressions available to sell or improving the fill rates of existing inventory. Additional impressions can be derived from increased ad load, but this is problematic in many markets as user expectations, particularly for premium video, are for a reduced ad load, not an increased one.
That leaves improving fill rates as the more viable approach to driving up revenue. But traditional media, including local TV, has often been handicapped from pursuing this strategy due to a lack of data. Some local audiences aren’t measured, or a program is given a zero GRP (gross rating point) rating because local providers only capture audiences of a certain size and up.
With the shift to advanced and connected TV models, additional viewing and behavioral data is suddenly available to TV publishers. This allows sellers to support advertiser demand for impressions-based and cross-platform buying, increasing their monetization potential on previously ignored spots, while helping marketers find the ‘right audience’ regardless of where and when the viewing takes place.
This approach is being successfully adopted in several local markets. Impression based business models can be seen in the U.S. with NBCUniversal’s acquisition and integration of Sky's AdSmart platform to bring targeted TV ads to individual households, in Singapore as Mediacorp shifts from shift from the traditional TV-metric of GRPs to introduce a pricing structure based on the digital CPM model (the cost required to get 1,000 impressions or views of an ad), and in Australia with Nine Network's small and medium enterprise (SME) self-service TV buying platform, which allows SMEs to purchase inventory across the Nine portfolio on an impression basis.
Sell More Effective Ads
Despite TV and full-screen video being extremely effective advertising mediums for both brand building and audience activation, the necessary ratings, research and conversion analytics have been too time consuming and tedious to attribute to local TV inventory. For most buyers, it has been easier to just buy rated programs and leave it at that. But that looks set to change; earlier this year the Television Bureau of Advertising (TVB) called for the move to impressions-based local TV currency, while Hearst Television announced at the same time that, in a shift away from traditional ratings, it would begin selling TV ads based on audience impressions.
Shifting to impressions-based buying enhances the effectiveness of automated TV buying and selling as it offers a standardized view of all impressions and the ability to capture data, which then informs outcomes, incrementality and attribution. With this shift, TV can start to compete with pure digital buys while overall effectiveness can be improved without needing to completely change the ad budgets.
Sell More Targeted Ads
Traditional TV advertising has long been focused on mass marketing, seeing wild success due to the scale and reach of the medium. And despite the new focus on digital being data-driven, TV was there first. The data in TV buying consists largely of a known, structured program grid, defined in advance, shown at specific times and measured by third parties on a sampled basis. This data is applied to planning, buying and measuring ad-supported TV and the ad trading is done hours to weeks or months in advance of the program airing.
With the development of digital advertising, media buyers are able to more narrowly focus their buying efforts. This has been made possible because digital media owners often have user or device data that allows for reaching a more specifically segmented, albeit smaller, audience with personalized advertising messages. In this instance, the media buyer uses data to decide which users to target with specific ads, as well as the price that they are willing to pay, at nearly the same time the ad is being shown to the viewer.
The availability of additional data from the introduction of digitally connected devices — TVs, smartphones, gaming consoles and tablets — has created additional demand for more targeted advertising on TV publisher inventory. This targeting can be used to go after high-value niche audiences, or it can be combined with the traditional linear programming to reach audiences that are increasingly hard to find on traditional broadcast programming as viewers shift to alternative screens and platforms.
Where We Are Today
Media buyers are looking to reach their target audiences in the right context and most effective environment, regardless of where they are or what they are watching. At the same time, TV publishers have been challenged to retain their share of ad budgets as user viewing habits shift and devices multiply.
Luckily, the availability of viewing data has opened up new possibilities for buying and selling premium TV inventory in a new way that better reflects how viewers interact with content today and how advertisers want to engage those viewers. Using digital-like audience targets instead of demographics, and an impression-based currency, the future of TV buying will allow media owners and advertisers to build on the strengths of TV to provide users with targeted engaging content at scale, while taking into account the reality of users’ viewing behavior.
Brian Golbere is senior VP, technology, in the TV Solutions Group at IPONWEB.