Advancing TV Advertising Into the Future – Your Standards or Mine?

So while a lot of attention has been given recently to measurement standards, what's actually holding TV back is its lack of automation and addressability. Only by embracing these changes will buyers and sellers benefit from the same methods as the financial markets.

How? Let's say you have three brands wanting to reach 25-to-49-year-old, upper-income, urban-dwelling females. But each brand has different business needs, and thus distinct metrics. Maybe the first is targeting the demographic through the upper funnel, while the second is using direct response and the third CRM. Automated trading will allow all three to compete effectively for the same inventory while allowing each brand to use its own methodology to determine the value of each placement and set its buys.

Better yet, each brand's prices will be determined by a system not unlike the one already in place for general online advertising. This would transform TV's overall ad look in the same way online tools like PPC and SEM have allowed local businesses to bid and compete against the big data resources of major advertisers. Furthermore, opening up the marketplace would drive demand and increase the value for all TV inventory.

Finally, through addressability, advertisers can ensure they deliver the right creative message to their various target audiences. The days of showing everyone the same generic ad will be gone. Whether it's through private marketplaces or open inventory systems, the delivery will be done one household at a time.

With better addressability and automation, buyers can bring their own data to the table, giving them the tools they need to make smart decisions about which networks, programs, audiences and dayparts to use, and in which combinations. That data will also enable TV ad buyers to know the habits of its viewers, creating a more effective measurement base than any standardized approach could ever provide.

Sellers would also benefit by having access to the same data to provide prospective buyers with rich audience information. This will help to price the inventory and guide prospective buyers on making better decisions about the value of each ad buy.

In a scenario based on automation and addressability, it doesn't matter if the GRP or CPM or some new metric is used as the standard. Nielsen's Total Audience Measurement, comScore's integration of Rentrak, and other methodologies would become additional inputs going into the total data mix. Marketers can selectively bring in the information that aligns to their objectives and transact upon it. The result is an elegant and efficient system that provides TV marketers the opportunity to capitalize on all the data assets at their disposal.

So what's preventing this from happening? Mainly just inertia. Rather than sitting around and waiting for industry standards to magically appear, let's move toward a more open and automated marketplace now. Here's a quick look at how we can persuade each of the key stakeholders:

• Networks and MVPDs: For media owners and operators to be willing to move off a system that provides big locked-in buys, they have to be assured there will be an influx of new advertisers and/or revenue from current advertisers. Here again, the stock market serves as a fitting analogy. Automated platforms opened opportunities to millions of new traders, and innovative applications of data science spurred institutional investment.

• Agencies: For media and DR shops to give up processes that currently afford predictable revenue and simple (if outdated) buying processes, they'll need to see the opportunity to overlay BI and analytics as a competitive advantage. Indeed, with Reviewapalooza as a backdrop, this should be a welcome aperture.

• Brands: For the big spenders to be willing to forego guaranteed inventory and buying power, they must recognize that in the future clout will come from a new form of leveraging scale -- data scale. Brands will be able to use everything they have from all sources to find the diamond inventory and drive more efficiency by matching actual viewing (vs. predicting viewing) with their buys.

Just like the stock market, it all comes down to dollars and cents. When it comes to advanced TV advertising with automated processes and auction marketplaces, overlaying key metrics on standard currencies makes the most sense.

The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage.com/MyersBizNet, Inc. management or associated bloggers.