Advanced audience targeting is taking a seat at this year’s TV upfronts.
Sellers are lining their arsenals with new products promising cross-platform reach, partially out of necessity. Viewer attention is fragmenting and advertisers want assurance that if they commit an upfront buy, there will be multiple points of execution.
It’s unclear the extent to which buyers are moving TV ad dollars to digital, but Standard Media Index (SMI) figures indicate broadcast ad revenues fell 6% in January “as a result of the soft upfront market and lackluster ratings,” while digital ad spend shot up 30% year over year.
NBC’s recent launch of Social Sync, a tool that unifies paid and organic social campaigns with TV distribution efforts, is one response to changing buyer needs. About a third of client business transacted at the NBC upfront last year included both television and digital extensions, but the network has loftier ambitions this year.
“We think there will be significant growth in the number of clients conducting business on a converged basis,” said Krishan Bhatia, EVP of digital strategy and operations for NBCUniversal. “Our goal is to cross the 50% mark and have half of our television upfront clients engage with us on a cross-platform basis.”
A+E Networks is also preparing to conduct converged upfront business.
It’s telling clients, “We can provide you with premium content, give you access to the demos you’re looking for and you can have it in digital [format or] video on demand,” said Sarah Shriver, VP of digital ad sales for A+E Networks.
One challenge it faces is justifying advertiser spend for newer formats like in-app video. On average, A+E sees 50%-60% of traffic moving from desktop into mobile and over-the-top environments, which Shriver described as a huge monetization opportunity for networks.
However, in order to command the rates it wants, the industry needs stronger mobile, streaming and cross-platform measurement, in addition to first-party demographics, Shriver said.
Consolidation Culture
The upfronts, when networks court advertisers for annual commitments around fall programming, have evolved as digital channels gain influence. On the agency side, the collapsing walls between digital video and TV buying groups are changing the negotiation process.
Chicago agency Spark SMG, for instance, is aligning TV and online video more closely.
“This will be the third upfront where certain agencies [will] have ‘video activation groups,’” said A+E’s Shriver. “More and more things are coming together at the same time.” Consequently, networks are revamping and consolidating their sales teams.
NBCUniversal has dedicated teams focusing on the core linear broadcast business, as well as “an advanced team … that focuses on how you bring the future to how you operate your business today,” Bhatia said. “We’re [going in to agencies and] talking about partnership opportunities around data-enabled buying cross-platform.”
Data Takes A Seat At The Bargaining Table
Urgency is an upfront hallmark, as buyers scuffle to get the best placements at the lowest prices. Like booking a flight during the holidays, if you book ahead, you’re guaranteed to get a lower price and the seat of your choice.
While new distribution platforms like Snapchat, Vessel, YouTube and Facebook – promising lower costs, better targeting, greater efficiencies and a young and growing audience – disrupt that model, the networks have premium content.
This dichotomy creates some discrepancies in upfront negotiations. While advertisers can use a drop in network ratings to argue for reduced CPMs, sellers often counter with data and new channels, bringing out proprietary audience targeting and new opportunities on third-party channels and apps – like Snapchat’s Discover.
But many buyers claim these new digital opportunities don’t justify CPM hikes.
“I’d like to talk about … how despite the fact that you’re losing all this audience, you continue to look for CPM increase,” John Muszynski, head of investment for Spark SMG, told Broadcasting & Cable. “So I think I’m being very generous in giving you 2% less than last year when your numbers are down 20%.”
Networks, however, insist audiences aren’t gone – they’ve just shifted to mobile and video on demand – and that TV companies play a critical role in digital platform developments. Facebook, Snapchat and video streaming service Vessel, for instance, are all courting networks for premium content licensing and revenue sharing agreements.
“What we’re seeing from social, whether it’s Facebook or Twitter, is a lot of their activity is centered around all our content,” said Donna Speciale, president of ad sales for Turner Broadcasting. “We know [what works for our audience] so now it’s a matter of putting that granularity of data on top of our inventory that will really raise the game.”
This goal is why NBCUniversal recently introduced its Audience Targeting Platform, designed to marry set-top box viewing data at an individual household level with third-party, purchase-based and behavioral data sets to provide better targeting against programming schedules.
“There are hundreds of potential audience attributes beyond 18-to 34-year-old males, or women 25-54, that specifically go after in-market car buyers or cereal buyers or homeowners,” Bhatia said. “This platform is intended to merge two very large data sets and apply that across all of our schedules and networks to help find those audiences at higher concentrations than you otherwise would.”
Programmatic, TV Style
Networks are being methodical about how they approach potential fluctuations in pricing due to new formats and automation.
“We run a very viable direct I/O business and although we have a traditional way of executing the deal, we also allow some line items on an I/O to be executed via DSP or programmatic tools,” said Jason DeMarco, director of yield optimization for A+E Networks.
In other words, A+E prioritizes direct-sold sponsorship deals, then addresses desktop, mobile in-app and connected TV inventory through private marketplaces. It’s using FreeWheel’s FourFronts programmatic reserve marketplace to set these pricing conditions, and to create a data escrow where marketers and sellers can perform anonymous matches against their unique data sets.
A+E’s private marketplace includes both biddable and fixed-rate CPMs. In programmatic guaranteed deals, buyers who commit to a set volume of impressions can buy on a fixed rate and achieve preferred access.
“We kind of separate that out as non-biddable inventory that’s fixed-rate, guaranteed and, to us, it’s premium because we’re truly taking a first look at all of our impressions and making sure we carve out the necessary inventory for that specific advertiser,” DeMarco said.
Whether data and technology ultimately upend the upfront is to be determined, but transacting on multiple currencies will remain a big challenge for both sides, at least for the interim, said Frans Vermeulen, VP of advanced ad strategy for Comcast.
“At the end of the day, you may have 100 units of supply across linear and digital, but a unit is still a unit of supply,” he said. “I might be trading some of those units in a data-enabled, impression-based purchase while the other would be a television GRP, so how do I map those together and reconcile those as a publisher in my yield?
