Revenue Management: The Real Heavy Lifting To Make Audience Buying A Reality For Brands

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

Today’s column is written by Joan FitzGerald, vice president of product management and business development at TiVo.

The data-driven, highly targeted, programmatic audience buying that has been the hallmark of digital advertising is now sparking a revolution in how marketers think about TV. Marketers are doubling down on targeting and bringing more detailed custom brand targets into their media strategies, which have long relied on simple age and gender demographic targets.

Today, buyers are demanding shorter timelines, greater transparency and laser-like focus on the consumers who the brands have defined as targets, such as heavy category purchasers or consumers in-market for a new vehicle. Brands define these custom targets based on various dimensions, such as behavior, attitude and purchase history. At the heart of audience buying is marketers’ desire to reach brand targets faster, with iterative response measurement.

In reality, revenue management executives on the sell side are enabling the change that the buy side is demanding. Revenue management executives are responsible for the new ad inventory management systems, business models and accountability that are required to make audience buying possible.

New advanced ad inventory-management systems are available now to help ad sellers make audience buying a reality for brands using TV ad inventory. These new systems actively manage delivery of brand target impressions, target rating points and reach.

Managing Hundreds Of Brand Targets

Older ad inventory-management systems managed inventory across a handful of demographic targets for each network and daypart. Since many TV ad buys were targeted to the 18- to 49-year-old demographic, these older systems worked fine because inventory management and allocation were not as complicated as they are in today’s world with hundreds of brand targets.

Advanced ad inventory-management systems manage inventory across hundreds, if not thousands, of brand targets. For example, think about managing an insurance target, several automotive buying targets, consumer packaged-goods buyer targets for multiple brands, a credit card target and digital ad exposed targets – all at the same time. Consider the complexities of guaranteeing that ads will be delivered to each of these brand targets.

Ad inventory-management systems need to accurately predict how many brand targets will be watching TV at the time the ad is actually placed. Predictions are a more significant concern than ever before. Advanced ad inventory-management systems use more sophisticated prediction algorithms to insure that guarantees on brand targets can be met in this new complex world.

Deliver The Brand Target For Every Insertion

In older media-planning systems, the brand target is little more than an annual or biannual propensity index. While ad agencies consider the brand target index when choosing media vehicles, it does not drive the sales planning process and is not managed as part of the ad inventory-management system. Brand target indexes may not be persistent for the media vehicle over time. Brand target indexes for program premieres and new networks are largely unavailable and not an actual prediction of audience in the future.

Advanced ad inventory-management systems actively monitor against delivery of the brand target and measure delivery of the brand target for each avail in the TV ad inventory pool, updated on a continuous basis. A biannual index in older systems is simply not accurate enough for ad sellers to guarantee brand target impressions and target rating points, which are impressions as a percentage of the target population. Continuous measurement of the number of brand target viewers who are achievable with available TV ad inventory is critical.

Advanced ad inventory-management systems interface seamlessly with traffic and billing systems to monitor whether the target rating point goals are being achieved with the sales plan. They make adjustments to available inventory to deliver the marketer guarantee.

Optimize To Brand Target Impressions And Target Rating Points

In older media planning systems, the media vehicles with the highest brand target index are assumed to be the best choices, even though TV ad inventory isn’t guaranteed on the brand target index metric. Using the highest brand target index is overly simplistic and not aligned with the way TV ad inventory is actually monetized. Buyers demand guarantees on target impressions, target rating points and, in the future, target reach. The focus on the highest brand target index causes misalignment with what is actually important to ad sellers and the brands.

Advanced ad inventory-management systems are powered with brand target indexes; however, they don’t simply select the daypart or network with the highest brand target index. Sales plans developed using new ad inventory-management systems are tightly aligned to the metrics where sellers are accountable – target rating points and impressions.

Advanced systems are more sophisticated in choosing which media vehicles to use and how the overall plans are optimized. They make more intelligent decisions regarding brand target indexes. Advanced systems optimize sales plans to target rating points and budget goals – and this may not always mean using the vehicle with the highest brand target index.

Continuous Ad Inventory Tracking, Pacing And Placement 

In any ad inventory-management system, management of the TV ad campaign to ensure delivery is mandatory. Advanced ad inventory-management systems monitor TV ad campaign performance against the brand target on a daily or even real-time basis through integration with the traffic and billing system. Sellers need to understand how much of TV ad inventory is available and how many brand target impressions are achieved or still available in the inventory pool.

As the campaign builds to deliver incrementally more brand target impressions with each avail, the system must enable ads to be inserted or reallocated based on actual brand target impression delivery so that marketer guarantees are, in fact, guaranteed. Advanced ad inventory-management system are designed to reliably deliver target impressions, target rating points and, in the future, target reach.

Looking Ahead

TV is experiencing changes that are the tip of the programmatic TV iceberg: Long planning and placement timelines are being shortened from months to weeks and even days. Brand targets, beyond age and gender demographics, are being used to buy and allocate inventory.

The starting point for programmatic TV is audience buying, where ad inventory is evaluated based on delivery of the brand target. To deliver on the promise of audience buying to marketers, ad sellers and revenue management executives require new, advanced TV ad inventory-management systems that offer continuous measurement and optimization of every avail, according to the number of brand target impressions that each avail can deliver.

Today, revenue management executives and their TV ad seller colleagues need to be able to manage ad inventory and guarantee delivery based on brand targets with the same accuracy and reliability as they have been able to deliver age and gender demographic targets. New advanced ad inventory-management systems are here to help.

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

 

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