Dave Morgan, CEO and founder of Simulmedia and the host of the PeopleFront, defined the big picture when he said, "There is a consensus that the next year or two will bring significant change. TV is continuing to make money and is expected to make money for some time. There are steps that TV companies can do to extend the duration and profitability."
Here are the different views on possible solutions:
View from the Street
Change, consumer behavior evolution and the limitations of the measurement in a world of ever increasing pools of data cause a confluence of challenges. "The nature of what is TV is fluid," noted Brian Weiser, Senior Analyst, Pivotal. "Younger demos change behavior more rapidly. Some behavior is not currently measured that would make consumption data more healthy." He explained that there was a recent CRE insights study that showed that TV is ambient in a world of multi-tasking. "There is still an important role for TV," he assured, "but it is changing" depending on the degree of programming engagement.
On the ad side of the equation, Anthony DiClemente, Managing Director, Nomura, said, "The U.S. ad growth is robust and we have upped our forecast. TV is showing unexpected resilience." That is this season. The projection may change in two or three years, DiClemente admitted. "Automation of TV ad selling is causing concern."
Affiliate fees are an area of current concern, however. There are persistent worries regarding cord-cutting, cord-shaving and further consolidation in the distribution space. "We are shifting to larger and more scaled companies," DiClemente said. "What is media doing with their cash? Are they investing organically? Are they automating? Or are they buying stock back? We applaud companies organically investing in the right ways, such as in infrastructure, programming, etc."
What the Research Says
The ARF recently completed an ambitious series of studies to measure how advertising works. "We gathered 40 industry leaders together, committed to a $1 million investment in three studies over 5000 campaigns, twelve years of data, $375B in advertising spend in 41 countries across over 100 categories in the areas of cross-platform ROI, improved creative and mobile mastery," explained ARF CEO Gayle Fuguitt. The insights were as follows: Advertisers need to invest across platforms, combine traditional and digital media, optimize digital by capping frequency and unify their creative while keeping in mind the unique characteristics of each platform to optimize performance.
"Targeting purchasers by direct match at scale increases ROI," explained Bill Harvey, Co-Founder and Strategic Advisor, TiVo Research and a frequent contributor to MediaVillage. "TiVo Research proved it with multiple advertisers. Now Simulmedia is proving it by running 72 campaigns for advertisers in 2015 using the same methods and showing ROI improvements in the same range as TiVo, i.e. up to +250%.
"Simulmedia is also reducing waste frequency and is targeting day-of-week for recency. An example of a campaign where the same brand's other TV had half the impressions in the excessive frequency range, the Simulmedia campaign had fewer than 5% in that bucket," he concluded.
Daniel Slotwiner, Director Advertising Research at Facebook, recently conducted a study with Neuro-Insight on the coordination of TV advertising with digital to get the best impact. "We measured memorability, brand linkage and likability linkage and found the most efficient way to drive awareness," he explained.
Connecting the Dots with Data
There is more data available than ever before and research companies are actively engaged in creating tools to maximize the value of it. But there are challenges. In the case of Nielsen, Steve Hasker, President and COO explained that, "We have been working with STB data for seven years, matching it up with credit card data and working on an independent currency measurement using the panel with large databases." But it has not been easy. "We are chipping away to get access to STB data," he added. "Most of today's STB data owners can't supply STB data over night."
Omar Tawakol, Senior Vice President, General Manager Oracle Data Cloud said, "We are running a data cloud. Having a census approach is very important. In digital everything is census based and things are starting to get really interesting in TV. We are connecting offline sales to digital activities and want to prove that TV ads drive sales offline."
"My clients only care if we moved the needle," said Wes Nichols, Co-Founder, Senior Vice President and Chief Strategy Officer, MarketShare. "They really don't care about measurement or the brilliance of a campaign, etc. There is a huge credibility gap between marketing and the C-suite. We are cobbling together data-based measurement and need to get a fuller assessment of our investment."
Buyers and Sellers of the Eve of the Upfront
What about content providers and buyers? From the sellers side, "Data has begun to figure into our discussion," said Arlene Manos, President National Ad Sales, AMC Networks. "But as a single company, we can't effect change alone. We are using data to change internally and to figure out how to get viewers acquainted with our diverse programming."
And the buyers side? "Traditional advertisers take a TV-centric viewpoint," noted Yin Woon Rani, Vice President, U.S. Marketing at Campbell's. "But digital is changing the nature of expectations. It is not that easy to compare between mediums so the real task for marketers is deciding where dollars can go across the media pool."
But there has been "an evolution over several years," said M'lou Walker, CEO, Matrixx. "We are getting more fine-tuned beyond demographics." Because Matrixx in is the consumer healthcare industry, M'lou explained that "knowing when our consumers are sick is more important for us. We need to find who she is at that moment of illness. So we take segmentation data and find consumers at different points and roll it all up. TV plus digital gets us much further. We can get to consumer in her moment."
As Dave Morgan concluded, the industry is now "More evolutionary than revolutionary but the evolutionary pace is picking up. We are swimming in data. How to can we best operationalize it?" That will remain the burning question as we are about to enter the next Upfront.
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.