How Do We Bridge The Gap Between The NewFronts And Upfronts?

lornebrownontvvideo"On TV And Video" is a column exploring opportunities and challenges in programmatic TV and video.

Today’s column is written by Lorne Brown, CEO at Operative.

How can we reach the people we’d ordinarily try to reach on their televisions, now that they no longer look at their televisions?

Consumers aren’t just watching cat videos on YouTube anymore. Viewers are leaving TV at about the same rate as they’re migrating to streaming video on demand for premium shows they could have watched on TV.

Soon, time spent watching digital video will outpace time spent on TV, while TV itself will become more connected to the Internet. At that point, the divide between the NewFronts and upfronts will no longer make sense.

The NewFronts, which ran April 27 to May 7, were founded by the portals to compete against the networks for video dollars in the upfronts, which run throughout the spring. The crowd at the NewFronts is growing fast. This year included a few TV crossovers, including Time Warner, Bloomberg and National Geographic, and many TV media companies hosted their own digital events separately from the NewFronts.

Advertisers know what they want: viewers, and they’ll take them wherever they are. The media companies that can rationally compete across all screens in the NewFronts/upfronts with the best packages will have the advantage. This will only happen if the way video is bought and sold can be streamlined.

GRP: A Sticking Point

The biggest gap in streamlined cross-screen ad sales is linear TV. Although the number of channels to consider has expanded, TV buyers still rely largely on gross ratings points (GRP), designated market areas and a few other linear tactics for the vast majority of their placements. TV, as a result, is stuck on an island as many viewers swim for more promising digital shores. Comcast Spotlight recently hosted a panel of TV veterans to talk about how GRPs are holding TV back, particularly in local markets where more targeted or local buying is impossible using such a metric, and how impressions would create more flexible buying options for advertisers.

Digital media buyers and sellers, on the other hand, are used to contending with an ever-expanding array of digital video formats and use reasonably granular and flexible metrics, including impressions and time spent with an ad. Even so, Videology recently reported that 90% of the ads it looked at were bought and sold in a pre-reserved CPM fashion, similar to TV. The benefit of digital though is that the ads can be bought using impressions, and so with smaller or local media buys, targeting and granular metrics can still all be applied.

TV still commands nearly 10 times more ad dollars that digital video does, so it is no surprise that TV has been slow to respond to shifting customer behaviors. Digital video ad spending is expected to increase 30% this year, reaching $7.7 billion, while TV advertising in the US will grow only 3% but hit $70.59 billion.

Yet the cost of using such different methodologies of buying selling and measuring TV and video is catching up to media companies that straddle both worlds. Buyers and sellers often have separate media planning teams, technology stacks, sales teams, contracts and billing processes for the two worlds. As digital grows, it will not be sustainable to have two parallel processes. It also won’t be effective for advertisers, which will increase their expectations of measurable and effective cross-screen campaigns.

The Case For Impression-Based Buying

The answer is not to start using GRPs online for premium video. Shows with small audiences, local video and any kind of targeted placements would suffer significantly. Even on TV, GRPs are particularly bad for small buys when a GRP calculation would end up being zero, Magna Global’s Janice Finkel-Greene, executive vice president of audience buying, explained during the Comcast Spotlight panel I mentioned earlier. Rather, TV needs to embrace impression-based buying so that advertisers can spend the way they want to – to reach audiences, wherever they may be watching.

Buying TV through a multiple systems operator like Comcast actually enables local and spot buys to be impression-based today, according to Seth Haberman, Visible World’s CEO. In order for more TV buyers to embrace impressions, the largest shift is a tactical one. Entities like Nielsen must take a leadership role in reporting and forecasting with impressions. Just like online, CPM prices should vary based on the value of the content and the viewer. Finally, and not so simply, widespread impression-based TV buying will require subtle but deep-rooted shifts toward the impression in many entrenched buying and reporting tools from proprietary systems to Strata and MediaOcean.

At the same time, TV is embracing technologies that bring it closer to digital, from on-demand and streaming video to YouTube channels. This is also true for the carriers like Verizon that are creating digital content delivery systems and attempting to tie together consumer experiences across channels with packaged offerings.  The recent acquisition of AOL is an example of this. Verizon sits on massive amounts of consumer and behavioral data. With AOL, it can unlock the power of that data, sell it by audience segment and do so across all screens. That’s powerful.

It’s possible that some TV entities will continue to try to keep TV separate and incomparable to other media by holding on to the GRP, but shifting consumer behaviors will favor the media companies that embrace impressions.

Follow Operative (@Operative) and AdExchanger (@adexchanger) on Twitter.

1 Comment

  1. "Advertisers know what they want: viewers, and they’ll take them wherever they are."

    Actually what advertisers want, are sales. And the media company that can guarantee an increase in sales for every product advertised on their network, station, or web site, will have an unbeatable advantage.

    Reply

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