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INVIDI Technologies Announces the Acquisition of Ooyala’s Advertising Technology Division
/in News /by Libby FakierImpact of Alternate Delivery Systems on Addressable Television
/in Blog /by Libby FakierOne definition of chaos is “complete disorder and confusion.” The origin of the word is pretty interesting: It comes from the Greek for “cha” (open) and “os” (mouth) – in other words, someone’s facial expression when witnessing complete disorder and confusion. There are a lot of open mouths in agency planning departments these days as television viewership, once so boringly predictable, seems to have gone totally off the rails. If you’re a planner you’re dealing with decreased overall viewership, shifts from broadcast networks to cable, shifts from ad-supported television to commercial-free television, and shifts from traditional MVPDs (cable, satellite, telcos) to Internet-based delivery systems or Over The Top (OTT).
Commercial television has been important to so many consumer-facing businesses that its rapid destabilization has caused great concern in the marketing community. The flight of television dollars to other, more predictable media has been impressive – though not if you’re in the business of selling television advertising time. Some advertisers have moved as much as three quarters of their television dollars to online advertising, product promotions, sponsorships and other so-called “below the line” techniques that are seen as more stable and accountable than commercial television. One thing that has remained stable is the number of network television advertisers – that figure hasn’t deviated much hovering at about one thousand.
The picture is clearer if we divide the “eyeball flight” into two types: First, commercial-free subscription services such as Netflix, Amazon, and Hulu. It seems like every week brings a new blockbuster du jour, another “must see” series on Netflix, HBO, Amazon or others. For now these eyeballs are lost to advertisers (there are rumors that Netflix will soon come out with a commercialized version). The second type is made up of those who choose to watch television from traditional sources but on alternate devices. Technology allows viewers to watch television whenever and wherever they want – literally TV Everywhere. Here, the picture for advertisers is brighter.
Developing technology will soon allow advertisers to find their target audiences in whatever time/space combination that viewers choose. Some level of targeting is possible even for anonymous viewers. Targeting authenticated or registered viewers across multiple devises (think iPads, smart TVs, smart phones) is even more powerful.
The media planner of the (near) future will have access to a dashboard consisting of every possible way of reaching their target audience. That planner will be able to find that viewer regardless of what content they’re watching and what technology platform they’re watching it on. This cross-platform planning dashboard will be able to aggregate audience delivery, cap frequency across delivery platforms and provide real-time audience delivery figures. As technology evolves further, real-time attribution systems will drive continuous campaign optimization with little to no user intervention. Advertising campaigns will reach their theoretical best in a much shorter time than today. And with the normalization of data across distributors, networks, and OTT providers, the campaigns can be planned and launched in minutes instead of weeks.
Yes, this sounds like pie in the sky. But there’s nothing standing in the way of it becoming reality. All it will take is some engineering attention and the recognition on the part of programmers and distributors that this benefits everyone – especially advertisers who are, after all, the ones with the money.
Written by Michael Kubin, EVP Media
Fragmented Viewership and Addressable Television
/in Blog /by Libby FakierThe media press appears obsessed with what’s happening to the television audience: Lower viewership levels and greater fragmentation. Viewership of commercially-supported television is certainly dropping. The impact of commercial-free programming from Netflix, Amazon and others is substantial, undeniable, and not reversible. We’re never returning to the good old days of three networks, 70+ prime time Houesholds Uisng Television (HUT) levels and 90+ 3-network shares. Life was so simple then – but we have to deal with this new reality and a future of even lower viewership and greater fragmentation.
Commercial television has seen the effects of several changes over the years. As the most impactful media available, it has driven the marketing success of a wide variety of consumer-facing products such as cars, consumer packaged goods, credit cards and insurance policies. Television’s power lay in its messaging (“sight, sound, motion and emotion”) as well as the vast audience it was able to reach. That lasted until cable networks came along, atomizing viewership (“57 channels and nothin’ on”). The wide range of choices fragmented audiences making it very difficult, and very expensive, to accumulate unduplicated reach. Then the Internet arrived with its ability to target specific audiences and measure the impact of the campaign through the availability of direct purchaser data. Attribution (one of those magic media words that appear out of nowhere and quickly become ubiquitous) made it possible for marketers to use their media dollars with precision and effectiveness. Ad dollars began to pour out of television.
Facing these market realities, a senior network sales executive recently told me his business is under pressure because “viewing levels are dropping by 8% a year, I have a fixed number of advertisers and I’m being asked to increase ad revenues.”
That’s all true, but despite what so many Chicken Littles believe, the sky isn’t falling.
Addressable television advertising focuses on what is most important – a one to one relationship with each member of a large audience. Program-based audience ratings are not as important as unduplicated reach. Today the only thing that really matters is being able to figure out exactly who is in the advertiser’s target audience – think of direct mail. If you’re selling dog food, you want to reach dog owners. If there’s a dog living in 123 Elm Street, Peoria – you want to reach his owner. And if there’s a cat living in 124 Elm Street – you have no interest in reaching that household. Simple concept, challenging execution. But that’s exactly what addressable television advertising is able to do and with unparalleled success.
It’s taken addressable television advertising in the US about 15 years to develop into a tool sophisticated enough to attract hundreds of national advertisers spending billions in ad dollars. Its rapid growth indicates it will continue to conquer a growing share of television ad dollars. Where in the past, television’s strength lay in cheap audiences, today addressable television’s strength is in both effective targeting as well as a re-aggregation of reach. It is now less important to select which program the viewer is watching; the important thing is that he/she is watching at all. When the viewer is watching, addressable technology is able to send the right message to that viewer, put a frequency cap on it so the advertiser doesn’t suffer huge variations in message delivery rates or drive viewer burn out, and ultimately, use attribution techniques to figure out which campaigns and audience segments worked best. That leads to a game change, coupling the ipact of TV with the kind of optimization that has been at the heart of success for online advertisers.
Media seems to transform itself roughly every couple of decades: Radio was big from the 30s to the 50s, broadcast television went from the 50s until the early 80s, cable television from the 80s through the early 2000s, and we’re now at the end of the second decade of the Internet era. If history is any indicator, this new technology – addressable television advertising – will rapidly grow and absorb advertiser interest, transforming television from one-to-many into one-to-one.
Stay tuned.
Written by Michael Kubin, EVP Media
