"On TV And Video" is a column exploring opportunities and challenges in advanced TV and video.
Today's column is written by Brian Lee, director of programmatic strategy at Cadreon.
I’m a digital guy and I will be the first to admit that TV is very powerful and should be the foundation of the marketing plan for most major brands.
However, in an age where fragmented, cross-screen video consumption is the norm, it is hard to believe that there are major brands that still want to take a linear-only approach to TV.
Disney, Amazon, MVPDs and networks are investing billions into streaming video because the TV market is clearly changing, but us marketers don’t seem to be keeping up with the pace of change of our TV partners.
If the TV networks are taking the initiative to disrupt their own lucrative business model, why aren’t marketers?
Complacency amid changing video consumption habits
In my opinion the root of the problem comes down to being complacent and addicted to linear TV.
I say complacent because it’s easy to stick to a script that has worked for decades instead of taking the effort to solve problems and adapt.
I say addicted because some marketers keep throwing more money at linear TV despite it costing more money for less reach from the same content.
In other words, many of us have remained resistant to change, even though we know that the landscape has permanently changed.
There is nothing wrong with investing heavily in linear TV. The problem is when marketers throw money at very broad TV audiences, even when results decline every year. Even worse, many brands claim to target millennials, who have cut the cord in a major way.
With clear viewership declines, why throw more money at TV without considering advanced TV?
The usual response (excuse): “Advanced TV is not scalable.”
Advanced TV is scalable
In a January 2018 Advertiser Perceptions survey of 171 US agencies and marketers, scale was the leading challenge with connected TV advertising.
Lack of scale in advanced TV may have been true five years ago, but scale is certainly not an issue with advanced TV now. Today’s increased scale is actually a perfect complement to the declining linear ratings, audiences and supply.
How to optimize your approach to TV
So how do marketers break their addiction?
I don’t think they should cut TV cold turkey, but rather take baby steps focused on four key areas: audience, testing, measurement and education.
1. Go where their audience is
This one is simple. Where does a brand’s audience consume video?
No, most advertisers’ true audience shouldn’t be people older than 2 years old – which is basically everyone – or adults 18 to 49 years old.
Marketers should identify their true audience and invest in reaching them where they are to avoid missing all of those light TV viewers and start driving more reach and frequency with the people who matter the most.
2. Test and learn
Marketers should start with networks and partners that their team is comfortable with and expand that list over time as part of a phased approach. This approach will allow marketers to test the waters in a familiar way and feel confident while getting their feet wet.
Ideally marketers are working with an agency, platform or network that can take their current TV buy and use modeling to provide a recommendation on an optimized cross-screen mix that includes linear TV, advanced TV, online video and other formats.
Alternatively, marketers can start by taking a small percentage of their linear TV buy – maybe 5%-10% – and test addressable and connected TV buys.
They should also ensure that they are investing enough money for the campaign to be statistically significant from a measurement standpoint. Don’t just allocate $1 million for the year just to say they did it, without understanding if that is enough money to move the needle for their brand in advanced TV.
3. Improve the measurement plan
The next step is to adjust the way you measure. We live in a world where you can go beyond reach, GRPs and cost per point as measures of success.
Marketers can start by estimating performance based on KPIs that they are familiar with and looking at the incremental reach of advanced TV.
Then, they should take the next step by putting additional measurement in place that goes beyond Nielsen C3 ratings if possible.
Ultimately, they should focus on business outcomes, which, for most companies, means revenue.
Where is the point of purchase for the brand and what is the best way to connect marketing dollars spent to revenue generation?
The way to go about it may vary by industry, and marketers may need to enlist third-party measurement or analytics firms to help them with this.
4. Education at all levels
It is imperative that marketers educate themselves, their clients and their organization on the changing TV landscape. I see many TV people roll their eyes at the mention of advanced TV. However, it is a marketer's job to understand the advertising landscape, and we need to take the decline in linear TV seriously.
This is not a fad: We are talking about permanent changes in TV consumption behaviors. As a result, marketers must build up their cross-screen knowledge to be as good as their linear TV knowledge at all levels of the organization.
The goal of all marketers should be to find the optimal media mix for their audience, using data and insights tied to business outcomes.
There should be a clearly defined limit to how much they invest in linear TV before they hit diminishing returns, and marketers should not be scared to stick to it.