Media – Takeaways on Advertising from the Rally in the Alley -- RBC Capital Markets

TV is Evolving but Not Dying for nowA major media planning agency said that it doesn39t see the ad market simply as TV vs digital as both are required in a major marketing campaign TV remains the goto medium for quotdemand creationquot IE awareness and impact Digital remains the place for quotdemand capturequot IE carrying the impression through to points of sale But media planners and sophisticated advertisers increasingly don39t think either works well independently and the ROIs are interconnected Hence we think TV ad sales are perhaps more defensive to ratings declines than we previously believed for now This is being exacerbated by wellknown measurement issues but overall we walked away feeling that advertisers are currently comfortable with TV budget allocations and pricing That said if improvements in mobiledigital advertising make it a substitute medium for demand creation then this could change over the longer termThe OTT OpportunityWhile the overall TV ad market seems fine the opportunity for ad buyers and planners appears to be OTT viewing where targeting is better These impressions are still nascent from a volume perspective as far as we can tell but they offer an exchange of the reach premium for the targeting premium Media buyers were thus none too bullish on reach as a longterm driver of CPMs but that said the shift in inventory isn39t happening overnight There were real questions as to Nielsen39s value to the ecosystem in this future worldThe Advantage of Digital Advertise Measure Iterate RepeatWhile big brands are likely to continue to put a premium on the impact of longform TV nichier brands like Etsy commented that they prefer the datadriven aspect of a digitalonly marketing strategy They39re looking for a fastevolving strategy of digital advertising followed by measurement and analysis which results in new iterations and a repeated process The velocity of this iterative brand advertising strategy is not considered to exist on TV It will be interesting if the OTT transition and associated better targeting shapes this trendAd Agencies Maintaining the Data EdgeMDCA39s Assembly acknowledged that transparency remains an industry issue that39s not going away As for the threat of disintermediation they believe the value of mediafocused ad agencies is a direct function of the data generated from media buying In other words it39s tough to compete in advertising analytics if you39re not also engaged in buying and measuring discussions with Nielsen comScore Facebook Google etc not to mention other marketers This data quothigh groundquot remains the most important moat in Assembly39s view In their opinion 30 of the value in a media buy is the resultant data and analysisAll values in USD unless otherwise notedPriced as of prior trading day39s market close EST unless otherwise statedLink to Full Research Report including Required Disclosures and Disclaimeramp174 Registered trademark of Royal Bank of Canada RBC Capital Markets is a trademark of Royal Bank of Canada Used under licenseThe opinions and points of view expressed in this article are exclusively the views of the author andor subjects and do not necessarily represent the views of MediaVillagecomMyersBizNet Inc management or associated bloggers

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Media – Takeaways on Advertising from the Rally in the Alley -- RBC Capital Markets

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