Gimmick or innovation? Buyers and sellers grapple over future of TV advertising

At this week’s Xandr Relevance conference, GroupM’s chief strategy officer Evan Hanlon said to a room full of brands, agencies and publishers that ad innovation can easily turn into gimmickry.

“A lot of these gimmicks that happens on our side is something that largely entertains this room, but not necessarily consumers,” said Hanlon. “Thinking about what it is that people are actually looking for in terms of common experiences, feeling like they're seeing themselves, representations of their beliefs – these things aren't going to be solved by those pieces.”

Hanlon added that new products that can “play within the content in which it’s distributed” is more interesting for agencies, including pause ads.

“I do worry sometimes that we focus on innovation for innovation's sake,” said Hanlon. “At the end of the day, a big missing piece of this conversation… is [asking] what is the creative experience, the creative message and what you actually use all of this technology for…. I think the jury is still out on the effectiveness of that on the long run.”

Peter Naylor, senior vice-president and head of ad sales at Hulu, adamantly opposed that notion of gimmickry, saying publishers now have an opportunity to offer contextual relevant products as the TV industry continues its move into digital.

“Fifteen and 30-second spots were created because the program grid started and stopped at the top and bottom of the hour,” said Naylor. “Those 15s and 30s are legacies of old TV. There's so much opportunity with an on-demand environment when everyone's viewing through an IP address.”

Joe Hogan, executive vice-president, sales and marketing at WarnerMedia, said that forward-thinking approach needs to make its way into traditional linear environments.

“We shouldn't call them gimmicks,” said Hogan. “It's our responsibility to put new things out there, to find partners that want to test these things with us or we will never move forward. If we simply take the same approach to streaming from linear TV with just 30s and 15s, we will find very quickly that the viewers in those environments are dissatisfied.”

WarnerMedia, for example, has started offering a new type of in-show ad. During a half-hour program, WarnerMedia will place an advertiser’s logo or product in the bottom right hand corner for the same amount of time as the TV network’s logo.

WarnerMedia isn’t the only network looking to update its offering. NBC Universal is pushing out its prime pods as part of a continued goal to cut TV ad time. Newly slimmed down Fox also introduced a slate of new products during its May upfront presentation.

David Campanelli, executive vice-president and co-chief investment officer at Horizon Media, said that innovation seems to be a way of correcting the over-commercialized landscape that the industry bloated with ads in the first place.

“A 30-second ad delivered in a long-form premium content is a very effective way to deliver an ad,” said Campanelli. “It's proven out over time, and we've over-commercialized it… [and] now we're trying to correct that through innovations. In some respects we're correcting mistakes we made in the past that we probably shouldn't have made in the first place. I don't know how much need there is because it is an effective way to deliver ads.”

Both the buy- and sell-side tended to agree that live content is both a desirable and effective way to deliver ads.

A&E Networks, for example, recently moved into live TV with its LivePD program. Ethan Heftman, senior vice-president of precision and performance ad sales at A&E Networks, said providing advertisers live opportunities is “something that holds a lot of promise in an on demand world.”

Advertisers want a seat at the table

On top of reshaping its ad offering, publishers are also banding together to make transacting easier in advanced TV, such as OpenAP and Project OAR.

Xandr also has its video ad marketplace Community, which recently added Bloomberg and Walmart’s streaming service Vudu to the mix.

Project OAR, a consortium dedicated to standardizing addressable advertising, notably has an agency advisory committee that includes the likes of GroupM, Omnicom and Horizon Media.

Campanelli said including agencies in that decision-making process is imperative.

“Too often what happens is a concept is developed and it works for the sales side and then it gets presented out to the buying community,” said Campanelli, “and a lot of the times the buying community is like, ‘This may have solved a problem I didn't have.’”

He added that the main draw of these consortiums is that they allow advertisers to test campaigns at a much larger scale.

“Uniformity, or at least cooperation on the sales side, is critically important,” said Campanelli. “It really leads to scale and allows us to not do one-offs that are smaller tests, but… to get to a point where we're buying at a much larger scale across the landscape, which is [what] many of our advertisers are looking for. Scale often prevents us from testing different platforms because it just might not be worth it if it's not big enough for them.”

Jason Brown, senior vice-president, head of ad sales partnerships Xandr, said these industry alliances are meant to foster partnerships that streamline the buying process.

"From our perspective, what we're saying to buyers and publishers is kind of the same thing, which is put your inventory into the platform," said Brown. "The advantages of putting the inventory into the platform is you sit on that deterministic dataset, and we can take this industry that we're in away from a mindset of cost savings to value, and show attribution and bring targeting, measurement and frequency management to all of the inventory in one buy."