“Data-Driven Thinking" is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Jay Stocki, vice president of digital services at Experian Marketing Services.
You won’t get fired for buying age and gender gross rating points (GRPs) at this year’s upfronts. But mark my words: Your days will be numbered if that’s your buying strategy in 2016. The transition to true audience buying is coming, but it’s not quite here yet.
If you have been following the coverage leading up to the upfronts, you can see that audience data and audience buying are the major buzzwords in 2015. Take a look at some of the recent headlines: “Viacom Joins Ad Data Parade As TV Upfronts Loom,” “Cablevision 'TAPPs' Into the Power of Addressable Advertising: Buyers Line Up to Trial Census-Data Platform” and “Digital Influences TV Buys As Networks Prep For Converged Upfronts.”
This coverage reflects the fact that buyers are seeking more targeting and measurement services to connect with TV audiences, and they have the leverage to demand it. In April, several leading television and media companies, including Viacom, CableVision, Univision, NBC Universal, Turner, CBS and Scripps Networks, unveiled new “audience-selling” solutions and capabilities to deliver greater targeting precision beyond age, gender and demographics.
But let’s be clear: This is still using television programming as a proxy for an audience. A media buyer can and should use all kinds of client and third-party data to optimize the linear schedules they are buying, but it’s still a far cry from the targeting that can be done in other formats. The upfronts still exist because no other event can deliver the scale and reach, even if it’s “audience by proxy.”
“Audience by proxy” will change as various forms of programmatic TV buying come to fruition. Despite some overhyped claims, we are still a long way from programmatic TV buying. We could argue over the semantics of what constitutes programmatic buying, but there are a few facts that we all can agree on: The current buying process is still very manual. The archaic linear delivery systems need an overhaul to allow for more automated buying and for the holy grail of true dynamic linear ad insertion. Programmatic TV buying technology will address these issues.
Until true real-time programmatic TV buying becomes a reality, there are a few things that a media buyer should consider this year. I like to call it a “surround-sound” approach, using the same data to craft an upfront audience buying strategy, but leveraging addressable TV, over-the-top and online video.
Addressable TV: The First Step In TV Audience-Buying Evolution
It is true that the scale is limited and the cost is slightly higher, but addressable TV has one huge advantage over the upfronts: It reaches the actual audience you are trying to target. And it’s not just a proxy, but the actual households. This allows for much better measurement, allowing detailed, closed-loop measurement with holdout audiences to determine a true ROI. Addressable TV will continue to improve. The scale is going to increase, the automation will improve and the cycle times will go from weeks to days. It’s not perfect, but it’s significantly better than buying April 2016 inventory in May 2015.
OTT Required For Millennials
The number of cord-cutter households today is 20% higher than it was a year ago, with approximately 8.6 million people moving away from traditional pay TV. Technological and demographic trends virtually guarantee that cord cutting will continue to rise as smartphone and tablet ownership increases and millennials become a greater share of the US adult population. Millennials are the most device-agnostic and often don’t mind watching video on a portable device, even if it means a smaller screen. To reach cord cutters, marketers must incorporate multiple channels, including email, mobile, online and OTT options, such as Sling TV, Hulu and Roku. As OTT options are upgraded, consumers will have more options to consume online video without sacrificing quality or screen size. Traditional linear TV buys will still be needed to obtain reach, but buyers need to take a hard look at the key audiences they can reach via OTT.
Data-Driven Strategies: Table Stakes For Online Video Campaigns
Standardized practices for targeting, measurement and key performance indicators now exist, which means more brands than ever are considering adding more budget to this strategy in their media plans. In terms of creative approach, it is also important to understand that commercials that may be effective for traditional TV may not necessarily work for online video use. Media buyers should ensure that they are using a message length, creative approach and call to action that is consistent with the each medium.
As a media buyer, you won’t get fired for your upfront strategy, especially if you are making the case on how you can combine your upfront buys with addressable TV, OTT and online video, using closed-loop attribution and maximizing your clients’ and third-party data sources.
But hold tight, change is coming.
Follow Jay Stocki (@jstocki), Experian Marketing Services (@ExperianMkt) and AdExchanger (@adexchanger) on Twitter.