The addressable TV landscape is increasingly fragmented by countless distribution channels, devices, video types, ad formats and pricing models. There are thousands of ways to buy video.
Data is critical to how advertisers navigate through this complicated marketplace, as well as to how they'll determine where to invest. But where are TV budgets going to be placed?
At The Drum’s Programmatic Punch US 2019, industry experts from Telaria, Dish Media, NCC Media and Forrester discussed the movement of budgets from linear to addressable TV and what the trend is likely to be in the future.
Defining advanced TV
Clarity is essential in a complex market, so the discussion kicked off by defining advanced TV and related terms.
Advanced TV is anything that's non-traditional broadcast cable delivered to the household through a pipe, says Sean Robertson, general manager, partnerships, Dish Media.
“In our world that's connected TV (CTV), it's over the top (OTT) and the definition is changing,” he contends. “There are new entrants which are, broadly, anything that's not traditional television delivered as a utility.”
For Andrew Ward, president of NCC Media, advanced TV comes under three pillars. The first being data; looking beyond the typical age/gender metrics bringing a richer audience definition into the TV ecosystem.
Second, precise targeting. “The ability to leverage... cloud-based architecture allows us to think about delivering audiences much more precisely,” he explained. “NCC Media talk a lot about addressability and the ability to narrowcast messaging into a more precise audience.”
Third, there's measurement. How advertisers think of accountability and performance measurement in more robust ways. “We [need to] think about the way in which TV drives the consumer through the funnel and begin to bring digital-like performance measurement into the TV ecosystem around ROI.”
Dynamic versus personal
A focal point in the industry right now is a where the brand opportunities lie depending on the medium: Are viewers watching on a traditional 60” television or are they curling up with their mobile device?
The answer: Yes. Many viewers use different devices at different times. So, the TV buying community had to go digital — but the digital community also has to learn TV, Adam Lowy, chief commercial officer of Telaria, pointed out. “That's the convergence of what we're all seeing, how this is all coming together. That also gets to the speed of delivery, through programmatic or targeting, or whether you're addressing what is addressable. One-to-one delivery as opposed to one-to-many delivery," Lowy said. “All that's starting to come together in this fierce converging battle... In the end, it's all about a consumer watching top-tier content with advertising housed in that premium content.”
When Sling TV (a subsidiary of Dish Network) launched, many assumptions were made because they were the first to do live linear, Robertson noted.
“The idea was that it was going to be younger in terms of the sub-base; there was going to be a lot more mobile and digital viewership on the desktop or mobile. What we found is that it's the same sort of viewing experience: 85% of it still happens on the big screen," he said.
“The TV cord cutters, cord nevers, they replaced the traditional utility with Sling and other OTT services. It's not just what we as marketers and professionals in the industry want, it's how is the consumer is actually engaging with the product and the content that's being delivered to them.”
Winterberry Group predicts that in 2019 marketing spending will increase on digital video, OTT and streaming about 20%, and on addressable TV by about 35%, with liner TV decreasing by only 1% — which still leaves it at about $69 billion. Programmatic buying is also experiencing growth. The question is whether all that growth will continue.
What's key for digital and addressable is that they're both one-to-one delivery methods, which hint on targeting and how to find your audience, said Lowy.
“There's still contextual targeting, but we're seeing that more and more of our conversations are about... how do I deliver to reach the audience I need? The larger scale delivery is going to continue to be the core of any plan, but really it's changing dramatically to that one-to-one on how to reach your audience,” he said.
Robertson added that as different companies are coming into the space that are changing what was data-driven linear into addressability, and as that scales, dollars will flow from traditional broadcast into that.
“I think TV is always going to benefit from this introduction of new technology. By in large, that's what you see. I think we're all in agreement that it's flowing the right way for us," he said, adding that the industry needs to ensure accountability and measurability as it evolves.
The purchase of marketing data specific to TV is going to increase from about 4.3% to $1.8bn this year, Winterberry predicts. So, what are some of the types of data available today that marketers should be aware of?
Joanna O'Connell, principal analyst at Forrester, said that there are all kinds of interesting data — from viewing data, location, device to audience. “The challenge is how do you take all of those bits and pieces, which is really how a lot of it exists today, and create something more cohesive,” she said.
The reality is that brands and marketers have a tremendous wealth of data, Ward added. “It's not for lack of data; it's really how you activate it and act on it. How do you target your audience beyond age [and] gender and... do pre-post test and control to study brand lift and sales data?”
Advertisers need to think about where the data is coming from, O’Connell noted. “We can argue about the quality of the data and all those things, but building an audience on TV right now across all of these environments is challenging and becoming more important," she said. "How representative is the data set? What kind of modelling is done to make sure that the data set is representative? How do you pull those data assets together?
"It's going to be an interesting year of those kinds of questions.”
Programmatic Punch New York took place on June 6. If you missed out on this event, our UK variant will take place this December, find out more information here. Or, join us in New York for Programmatic Punch US 2020.