Fox is making a big move in the data-driven advertising race, offering to sell commercials—and make guarantees—based on how many potential customers they reach rather than viewers in the broad demographics measured by Nielsen.
By introducing a suite of four products including a programmatic offering under the Audience Insights Manager, or AIM, banner, Fox is joining other TV companies looking to compete as digital increases its share of the advertising market because it is seen as more precise, more efficient and more accountable by clients.
Comcast’s NBCUniversal, Time Warner’s Turner Broadcasting and Viacom have also introduced suites of data-based ad products designed to reach advertisers customers more effectively and efficiently. Those programmers are trying to cut their reliance on Nielsen ratings, which are declining, limiting their ability to increase ad revenues.
Fox is introducing a new metric, tCPM, or targeted cost per thousand views for transactions and guarantees. But advertisers who enjoy low rates because they’ve been big spenders for a long time might balk at a system that raises the price they pay on a traditional cost-per-thousand viewers basis.
James Murdoch, CEO of 21st Century Fox, has called on the TV advertising business to be more innovative and Toby Byrne, president of ad sales for the Fox Networks Group, said “the goal of our data products is to deliver more value to our advertisers.”
The new products under AIM are:
- Optimized Audience Read: Uses Fox’s proprietary data engine to improve campaign performance by recommending commercial inventory based on advertiser-supplied precision targets and by providing a tCPM (targeted cost per thousand) read of consumer audience delivery.
- Target Audience Guarantee: Provides a single linear tCPM guarantee across Fox Networks using Fox’s premier data enabled television platform to forecast and optimize campaign performance.
- Multi-Platform Guarantee: Offers a platform-agnostic premium content audience package with a tCPM guarantee across linear and nonlinear properties.
- Linear Programmatic Buying: Empowers advertisers to buy Fox national inventory against advanced audience targets within a private marketplace. This allows for integration with leading media buying and demand-side platforms.
“We feel like we have a meaningful set of new products here. We’re taking it a step further than some competitors in that we’re willing to transact on a different metric,” Byrne said. “The large majority of our business will still be conducted on the Nielsen currency but this is an opportunity to move the ball forward and do business in a more progressive way.”
Fox has been testing the products with a handful of agencies and clients.
Byrne said he expected AIM to be a big topic of conversation in the upcoming upfront season, a time when TV networks sell a big chunk of their advertising inventory for the new season.
“We are open to doing business in new ways with innovative ad products that deliver value to our clients,” he said. Delivering more value for the client should also increase how much revenue Fox is able to generate. “If through our data we can also prove that certain programming has been undervalued, that would benefit us as well.”
But while Fox and other programmers are pushing data, change seems to come slowly to the TV business, especially now, when the ad market is going through a hot spell.
“It will be interesting to see the adoption rate. I think there will be different appetites for this from different clients and different agencies,” he said.
Data and programmatic have been huge buzzwords in the TV business. At the same time, big programmers like Fox have been consolidating their ad sales unit, selling broadcast, cable and digital ad through a single organization.
That change shifts the focus of the ad business from selling ads in particular shows to selling audiences with certain characteristics, regardless of what they’re watching or when. While demand remains high for hit shows like Fox’s Empire, media companies are betting that a data strategy will increase demand for less high profile programming.
Fox’s jump into programmatic sales of its linear programming is also a big step into an area that was once scary because of the potential for turning commercials into commodities and lowering prices. Fox is expected to sell its programmatic ads via private markets that will enable it to better control its inventory and pricing. It is also expected to sell only ads on its cable networks programmatically.
Last year, Fox Networks acquired true[x], which creates innovative ad format for on-demand media.