As a part of its membership in the professional organization egta, the Association of Television and Radio Companies from Europe and beyond, the Association of Commercial Television was granted the opportunity to host egta’s 2019 professional CEO & Top Exec’s Summit – the annual, 2-day egta-member meeting, where media companies share their experience, inspiration and contacts. This year’s meeting took place on June 6-7 and included more than 220 participants from 33 countries.
What does this say about programmatic video ads?
Despite marketers’ efforts with advanced programmatic and data targeting for video ads, consumers still find that they are more likely to be served a relevant ad on linear TV.
According to a survey conducted by Adobe in February 2019, 49% of US internet users said that TV was one of the mediums where they were most likely to see a relevant ad, while just 12% said the same about streaming video.
Valuable ad placements and the ability to reach a mass audience have kept TV ads relevant in the digital age. But digital video allures marketers with advanced targeting through programmatic advertising, which uses audience data that TV doesn’t have.
This year, we estimate $29.24 billion will be spent on programmatic video ads—accounting for 81.2% of digital video ad spend. For TV, just 4.0% of ad spending in the US will be programmatic.
There are many perceived advantages to programmatic advertising, most of which revolve around lower costs and the ability to harness data. In response to a November 2018 survey by Digiday Research, 56% of US agency and brand media buyers said that increased targeting and optimization was the biggest advantage of programmatic advertising. But if viewers still find TV ads to be more relevant, then programmatic may not be as effective as some marketers perceive it to be.
Consumer sentiment does indicate that ads are becoming more relevant overall. In the Adobe study, 46% of consumers felt that the ads they saw currently were more relevant than those they were served a year prior. But, most marketers can agree, there’s still a long way to go before personalization is perfected.
Only 32% of marketers believe their industry is delivering personalization effectively, according to a survey conducted in February and March 2019 by Evergage and Researchscape International. When asked how satisfied they were with the level of personalization in their own marketing efforts, 50% said they were either not satisfied or slightly satisfied, and 34% said they were moderately satisfied.
While marketers may have faith in programmatic’s potential to target the ultraspecific, it is possible that the accuracy of the data just isn’t sufficient—and that’s why these ads aren’t resonating with viewers.
Many marketers would agree, per the Evergage/Researchscape International report. Nearly half of respondents (45%) felt they didn’t have sufficient data and insights for effective personalization.
Collectively, online businesses are the biggest category of advertisers on TV in the UK, accounting for almost 15% of total spending via this channel in 2018 and 40% more than the next biggest category which is food.
Latest figures from Thinkbox indicate Amazon, in particular, boosted its TV spending by 21% to £60m last year as it promoted its Alexa voice assistant, putting it in the top three advertisers, behind Procter & Gamble (£169m ) and Reckitt Benckiser (£79m).
The top 5 biggest spending categories on TV in 2018 according to Nielsen’s data were:
- Online businesses: £760m (7% up year on year)
- Food: £534m (3% down)
- Cosmetics & Personal Care: £437m (1% up)
- Entertainment & Leisure: £380m (no change)
- Finance: £378m (18% up)
Thinkbox also observed 867 new or returning (after a gap of at least five years) advertisers on TV, possibly encouraged by the fact that the average cost per thousand (CPT) for broadcast TV ad views, at £5.13, was 21% cheaper in real terms than 10 years ago.
This figure, Thinkbox clarified, only includes TV advertising that is watched from start to finish at normal speed; TV ads that are seen during any fast-forwarding are free to advertisers.
“TV advertising put in a strong performance in 2018 given the challenging economic environment,” said Lindsey Clay, Thinkbox CEO.
“We are seeing signs of money moving back to TV from lower quality online environments which can’t guarantee a safe environment for brands,” she added. “It is a testament to TV’s continuing power to deliver that a company like Amazon, which understands its customers so well, is using TV to power its success.”
Total TV advertising in 2018 amounted to £5.11bn, representing all money invested by advertisers in commercial TV in the UK across all formats and screens: broadcast TV spot and sponsorship, Broadcaster VOD, addressable TV, interactive TV advertising, and product placement.
While addressable TV has been talked about in certain industry circles for some time, it seems the wider marketing industry has yet to truly appreciate its potential.
With new, head-turning channels and marketing approaches launching all the time, it can be easy to overlook the transformation other media channels have undergone, especially those around for a long time.
For the past year, ISBA has been working with its TV and AV Steering Group to fully understand this innovative advertising technology, get to grips with the opportunities it offers and get a heads up on what’s over the horizon.
Opening up TV to new advertisers
Addressable TV appeals to existing TV advertisers looking to combine linear TV’s broad reach with the targeted capabilities of addressable TV advertising. Which leads us to the real pro: addressable TV lets them reach niche audiences or test specific groups of consumers and how they react to new marketing campaigns.
In addition, it also enables brands who could not previously afford to advertise on TV, the ability to do just that – allowing SMEs to add TV to their marketing mix and target consumers they want to reach.
A new landscape
Previously TV and web technologies were considered separate elements, often planned and bought completely separately or even by different marketing teams. Yet when people watch TV, increasingly it will be on a digital device and often online or interactively.
The TV and advertising landscape of today includes digital broadcast and IP linear channels, closed format on-demand, web-on-demand, short-form, and interactive TV formats.
Addressable, data-rich TV advertising is emerging as a new advertising platform and our industry must be able to review and debate the media landscape, evolving right in front of us. To do this, all players need a clear understanding of the TV distribution and advertising technology and be precise in their use of an agreed TV and advertising terminology.
With the arrival of Addressable TV, comes the inevitable new language that surrounds it. But as we wade through the wording and attempt to define ‘what it’s going to do for me’, it becomes clear that the lack of real information as to the possibilities is the bigger issue.
Bobi Carley, who has recently joined ISBA, is very vocal about ensuring innovation follows demand “We need the advertiser’s voice to be recognised as a principle stakeholder in the shaping of this key market as it matures to ensure it does so in a way that meets needs”.
To this end, we have worked with Nigel Walley at Decipher (and were supported by Sky) to produce our guide to addressable TV, The Emerging Context for TV Addressibility. We hope it will start to fill the education gap among marketers allowing them to play an informed role in how Addressable TV develops.
Addressable TV is now at the point where this debate can happen and the industry needs all players to be sufficiently informed to join in.
To date, Addressable TV’s scale has been limited, however, in the UK this is undergoing rapid change. Sky Adsmart, for example, is currently the only product in the marketplace and continues to evolve in 2019 with Virgin Media households being added to the Adsmart footprint in April and with YouView due to be added later in the year.
As we continue down the addressable route, the industry will be watching in anticipation for ITV and Channel 4’s plans.
In the past, broadcasters have tended to work in isolation. ISBA welcomes the increased collaboration between Broadcasters and would encourage continued investment in the growth of Addressable TV to deliver solutions to advertisers at scale.
Like two siblings vying for a parent’s attention, digital and traditional advertising have been fighting for advertisers’ attention since digital came of age in the post-dot-com bubble era. Many have portrayed this as a war between generations, where the old guard “just didn’t get it.” But this shouldn’t be seen as a battle of relevance between old and young or a battle for the billions of dollars of media that advertisers spend. Because the losers in a war of this kind are not just the advertisers, but also the consumers they serve.
While we all should acknowledge the rise of digital advertising as a strategic media channel in an advertiser’s arsenal, the more beneficial point of view is one where we get rid of the “zero-sum game” model where one wins and the other loses. Instead, we should take an “additive” point of view, where advertising itself evolves and new tools and perspectives develop to meet advertiser and consumer needs.
This need to evolve can no longer be ignored by the old guard, as the young upstart digital has finally usurped TV as the dominant advertising media by spend. In 2017, digital marketing overtook television advertising for the first time. According to reports, TV advertising generated $178 billion worldwide with digital reaching $209 billion.
While the great marketing divide debated traditional vs. digital and old vs. new, TV and digital marketers went to battle by picking sides. However, actual consumer consumption trends don’t support this. According to the August 2018 Nielsen report, people are actually watching more — not less — media, especially when you factor in consumption on tablets, smartphones and the web. On top of that, adults in the U.S. actually spent more time watching live TV each day (16 minutes more) in 2018 than they did in 2017.
Have we thought about media usage wrong and, in turn, are making decisions because it’s been a “one or the other” mentality?
Done right, television can provide the scale and memorability that advertisers are after. Based on compiled data from The Global TV Group, TV reaches nearly every person on the planet in the course of a month, with 90% being reached each week. It’s this reach that makes TV such a powerful form of advertising. TV not only helps you reach a large audience, but you also can reach the right audience via behavioral targeting. If you think TV is only for traditional brands, think again. New-age brands, like Fitbit and Airbnb, have seen immediate and significant increases in digital engagement (measured by site traffic) once they started advertising on TV.
“The reality is Google doesn’t motivate a search. It simply enables it. No one randomly types in the name of a brand, product or service. It all starts somewhere else. To see the big picture, one must look at these cross-media connections. You need to focus on the synergies, not the divisions, that exist between TV and digital … The more we think about Google as a destination and less as a starting point, the better we’ll understand its connection to television,” said Bill McCabe, president and CEO of Eicoff in a March 2018 blog post.
A Google study on TV’s impact on search in 2010 and updated in 2017certainly acknowledges the correlation between the two as well. And Google’s groundbreaking work on Zero Moment Of Truth and micro-moments reinforce that search is growing, but ignore the “stimulus” that drives search, even though it is clearly part of the model.
Television’s scale and awareness are undeniable, and digital provides unmatched precision. In fact, we’re seeing more companies, including our own, focus on merging broadcast TV ad performance and digital engagement. Based on data on how a TV ad is performing via digital engagement, advertisers can adjust search advertising bids and budgets and identify broadcast opportunities for improvement. Moreover, you can gain insights into your ideal customer with granular data on who is interested in your product, brand or company. This detailed view of who is interested provides an opportunity for companies to drive engagement. You can encourage your audience to interact with you and draw them in.
For those that want to start an armistice between TV and digital advertising within their own organizations, here are a few great first steps:
1. Improve cross-team communications. Encourage your digital team to ask the TV team about their media strategy and attend a TV media-oriented conference and vice versa.
2. Find a web analytics solution (in addition to Google Analytics) that gives you access to visitor-level data that can be exported for analysis.
3. Request TV media clearance reports at the spot level with date, time, creative and market data for each spot run.
With this data and free data analysis tools (like Google Data Studio), you can begin to quantify basic “lift” generated by TV and start exploring other ways to proactively use this data to activate new campaign strategies.
TV’s scale and digital’s precision are better thought of like peanut butter and jelly: better together. The latest Facebook IQ study shows that direct correlation. This study observed the everyday behavior of U.S. TV viewers and revealed that 94% of those studied had a smartphone “at the ready” nearby while watching TV.
So, come on, TV and digital, it’s time to stop the feud and work together and add your strengths for the greater good. Television, you build credibility and scale that drives digital engagement. Digital, you supplement TV with microtargeting on additional touch points like paid search engine ads, audience retargeting, display ads and social media.
When you both grow up and realize that you both support and need each other, advertisers, consumers — frankly, all of us — will be better off.
The slow but steady digitization of TV advertising will place further pressure on ad measurement companies to create more robust cross-platform metrics and attribution models. But for that to happen, several types of companies—including multichannel video programming distributors (MVPDs) and TV networks—need to update their technologies and strategies.
TV ad buyers have long advocated for more precise metrics, but measurement firms have struggled to create innovative products that work within TV’s legacy infrastructure. While there is no single metric that perfectly captures how legacy technology stymies TV measurement from evolving, it is telling that most ads on linear TV have been sold and targeted the same way for decades. With TV advertisers still reliant on direct sales and proxy targeting, it isn’t surprising that traditional TV attribution models have become outdated.
However, TV advertising is evolving. We expect a 58.4% increase this year in US programmatic TV ad spend. We also expect TV ads to become more targeted. We forecast that addressable TV ad spending in the US will increase 23.3% in 2019 to $2.54 billion.
The growth of advanced TV tactics will require marketers to adapt how they handle TV attribution. We spoke with CIMM CEO Jane Clarke about TV attribution for our upcoming “US Digital Display Trends 2019” report.
How is TV attribution evolving?
You have to think about it from a couple points of view because attribution is a complicated topic depending on if you’re looking at it from the marketer, media company or TV network publisher point of view.
How are TV networks evaluating attribution?
From the TV network point of view, even if the data are not perfect, it’s better than not having data. And so they’re spending a lot of time learning about the data.
There is a lot of learning that’s gone on this past year. It will continue, but they’re very quickly learning about which data sets work in which use cases. The MVPDs that were not making their data available are finally doing so because they realize that it tells a great story for the TV industry. Even if Comcast is reluctant to license their data to all the research providers or networks for content ratings, they’re very happy to give the data, almost free in some cases, to these attribution companies because they have seen what a difference it makes in telling a brand-list type story for television.
Are TV marketers approaching attribution differently?
The marketers look at different kinds of marketing and pricing and competition and the environment and the weather. There are so many factors that go into their media mix modeling or multitouch attribution.
The marketers will get savvier about asking questions: “Are you creating the right control group? Do you have a nationally representative sample?” They’re going to make it harder for the TV people to just imitate what digital did.
Will TV attribution continue to change over the next year?
A year from now, we’ll be more sophisticated users of these products. And they won’t be making the same mistakes. What happened in digital was everybody just did the data matching and thought they created a control group then showed unexposed, exposed, and if there was a sales list, they attributed all of it to Facebook, Google or their website without realizing that this was a lot more complicated from a marketer point of view.
How will marketers learn from their digital attribution efforts?
They’re being a bit more responsible about it because everybody knows the problems. If you just go out and do exactly what Facebook and Google did and try to imply that any brand listed is due to advertising on your property, you lose credibility quickly. I do think that the marketers are getting a lot savvier about measurement.
For brand marketers, video continues to be the most important story in media. Audience behavior is evolving rapidly across generations, and consumers now watch more than eight hours of online content every week, according toThe State of Online Video 2018 report by Limelight Networks.
Faced with a fragmented device landscape, advertisers are seeking greater simplicity and transparency. Consumers are more concerned about data and privacy, following the rollout of regulations such as GDPR and the California Consumer Privacy Act. Additionally, adtech partners are grappling with the technical challenge of personalizing video ads for prime-time-size streaming audiences.
These issues are poised to take center stage next year, and advertisers should bear in mind these four top trends as they approach their 2019 video strategy.
1. New offerings will make OTT a must-have for achieving meaningful reach.
Given the expense of cable bundles in the US, consumers are leading the charge in embracing more affordable digital options. Nearly one-third of adults now belong to the cord-cutter or cord-never camps, opting to watch their traditional TV content through new OTT services. For advertisers, this trend means that post-cable distribution is essential in achieving meaningful reach for any video campaign.
Targeting remains a challenge in these environments. CTV — like mobile apps — is a cookieless environment, and there are hundreds of OTT services and connected devices. Fortunately, supply-side players are innovating to better coordinate this inventory and improve audience targeting.
2. Traditional pay TV will continue to influence the video landscape.
Despite the growth in OTT, cable remains a dominant force in the industry. Pay TV captures nearly five hours of average daily viewing according to Nielsen, compared to only 46 minutes for long-form CTV content. Cable providers are also recapturing value from lost subscribers through investments in many leading digital platforms, from Hulu (Comcast) to Sling TV (Dish) to fuboTV (AMC Networks and 21st Century Fox).
It’s become increasingly clear that traditional TV is far from dead, but instead is experiencing a major inflection point. Expect to see more broadcast programmers repackage their inventory across devices and platforms to simplify things for buyers in 2019. These traditional media companies will also become savvier in collaborating with ad tech partners to facilitate data activation at scale, enabling brands to personalize video messaging for different viewer “personas.”
3. Shifting consumer expectations will drive innovation in ad transactions and delivery.
With countless video options available on TV, consumers increasingly won’t tolerate irrelevant or disruptive advertising. In fact, nearly 30 percent of U.S. consumers now use ad blockers, according to Statista. In the coming months, we’ll likely see more aggressive efforts to combat ad fatigue, such as the decisions by NBC and Fox to cut down total ad time in 2019 in favor of less-intrusive and higher-value ad products.
While TV advertisers have traditionally focused on scale for their broadcast campaigns, modern advertisers must be more calculated in their efforts, prioritizing relevancy over reach. But the first-party data necessary for executing such personalized campaigns remains difficult to activate. The industry will see adtech partners introducing solutions that help buyers and sellers harness the power of first-party data, while keeping that information anonymous and secure.
4. Transparency efforts and regulation will spur larger investments in data management.
The boom in video has unsurprisingly attracted some bad actors. Given the higher ad rates for video, fraud occurs nearly twice as often with that format than with other formats, such as display. Recent initiatives led by the IAB have helped combat fraudulent activity, with protocols like ads.txt and ads.cert preventing domain spoofing by signaling to buyers which inventory is authorized by the seller.
Many buyers and sellers are demanding greater transparency through supply path optimization (SPO). SPO tools use algorithms to filter out fraudulent bid requests and streamline paths to inventory, eliminating costly middlemen. Over the next year, there will likely be a reckoning amongst supply-side platforms, as buyers increasingly seek partners who can maximize performance and ensure brand safety.
Agility is essential
Above all, 2019 will require brands to be open and flexible with regards to their video advertising strategies. The most effective buyers remain sensitive to shifts in consumer behavior, while also proactively seeking opportunities to responsibly improve targeting and personalize their campaigns. Like any year in digital media, the only guarantee is change.
Kevin Hunt is senior vice president of global marketing at SpotX
It seems like a good time to relive some of the most-hyped technologies and trends predicted to change the world of advertising in 2018.
Here are some of my personal favorites:
Blockchain. There’s no question that blockchain technology will find many applications for the advertising industry at some point — some with real market impact. However, blockchain is not going to revolutionize our industry nearly as fast as the hype would have you believe.
AI. Yes, artificial intelligence is an important technology that has been with us for decades, but is finally showing the capacity to improve computing systems in a number of industries, advertising included. However, the hype of AI for advertising massively overstates its capacity for actual real-world impact in the business today.
Data science. I am a big fan of data science, and spend a lot of time personally working on increasing its application and impact on the advertising industry. However, anybody who’s realistic would realize that the vast majority of decisions made in advertising are not even very empirical, so we shouldn’t expect “big data” to change advertising — not until our industry becomes more comfortable making decisions on even “small data.”
What market dynamic might live up to its pre-season hype as we head into 2019?
My bet is the D2C movement. Not since the emergence of the World Wide Web have I seen something emerge that could be as consequential on the advertising, media and marketing ecosystem as the revolution being staged today by these digitally based brands to undermine channel-dependent incumbents in industries as far-ranging as razors, contact lenses and mattresses. This trend will only accelerate in 2019.
What do you think? What technologies or trends didn’t live up to their 2018 hype?