Optimizing Networks -- Bill Harvey

Networks selling their ad inventory have traditionally taken an adversarial stance to buyers in the sense that the focus has been on who wins the CPM negotiationWhen Apollo reintroduced TV program selection to reach purchasers Irwin Gotlieb said amp8220The networks always trump preference with pricingamp8221 Meaning that if the buyer tips hisher hand that they want a specific program perhaps because it has a lowerthanaverage eCPM against the brandamp8217s category purchasers the networks will upprice the CPM on that program to neutralize the programamp8217s advantage to the buyerThis of course is diametrically opposed to the idea of an Optimizing Network An Optimizing Network ON is one that sets out to offer and provide the optimal schedule to each buyer for each brand campaign The Traditional Network TN is playing the game of maximizing its own shareholder value without regard to the buyeramp8217s or the clientamp8217s shareholder value The TN has every right to do this since everybody has been playing that same game so whatamp8217s wrong with itIn fact the TN is making sure it has no remnant inventory that has to be sold cheaply or given away Remnant inventory is the problem that the TN is trying to solve by creating blockbooked packages where you have to take some stuff you donamp8217t want in order to get the stuff you do want On the other hand the ON just wants you to get the stuff you should want based on the numbersHow can the ON deal with the remnant problem The best practices answer is to find the brands that the remnant is good for Every spot is good for somebody Reports can be run that identify who to offer the spot toWhy should a TN consider converting to be an ON The only possible reason would be for greater business success If one can sell out at the highest CPMs by being an ON with higher CPMs and sellthrough than one can get by being a TN then convert Otherwise donamp8217t Itamp8217s as simple as thatWhat evidence is there that a network can make more money by being an ON The proof is most easily seen with addressable commercials The original idea I had for addressable commercials is the winwin of it The buyer gets the lowest possible eCPM which in aggregate adds up to the highest CPM from the networkamp8217s point of view This is illustrated in the actual data example reported by my company Next Century Media in the days of yore the 90sAs shown in that table based on Scarborough data put through the NCM Optimark system as a simulation of what settop box data would later confirm in all the Comcast and Cablevision implementations in the current era each advertiser reduces hisher eCPM while the seller gets 417143 for a spot that previously had brought only 177600The same thing can be done with less leverage in nonaddressable commercials by using the programamp8217s skew toward the target as the mathematical driver of the equation along with cost and any sexage viewer presence desired Although nonaddressable leverage is less it can still account for up to 2535 ROI increases your amp8220mileageamp8221 may vary as proven by TRA studies with major clients copresenting at ARF conferences The ROI increases with addressables will be even higher of courseThe idea of the ON is that the better the job done for the buyer side the more successful the network will be in the long run A winwin confluence of interest amp8212 buyer and seller as partners both on the same side of the table This lens is also helpful in thinking up the most creative brand integrations in programs Cast presenter commercials are going to be making a big comeback as we enter the age of Optimizing Networks and as more and more TNs convert each year from now onPractically all of the ONs we see nowadays are in digital or mobile and all of the agency trading desks fit in this category In television Simulmedia is the leading Optimizing Network Simulmedia started out optimizing for tunein advertising because the conversion rate on that form of advertising can be read directly by seeing the proportion of those reached by any given tunein spot airing who then watched the next telecast of the promoted program Simulmedia data sees that such conversion rates can go as high as 80 for TV tunein spots Dave Morgan who had done similar work in digital at TACODA notes that the conversion rates on TV tunein spots are literally ten times higher than the conversion rates for tunein display ads in digital The big news is that Simulmedia will now be guaranteeing delivery on purchaser targets armed with TRA and now Nielsen dataOne day all ad sellers will be partners to the buyers incentivized by bounties paid for ROI success on top of eCPM rates to the sellers in parallel with bonuses to the agencies involved in the ROI success Everybody will be on the same side of the table benefitted by ad success for the brand This will all be made possible by automation and measurement systems for tracking offline plus online sales and other relevant effects with accurate validated attribution to the ads and vehicles that performed bestThe negotiating stance adopted each morning upon awakening by agencies and ad media sellers will gradually fade into irrelevancy as they will realize they can make more money by helping to benefit the brand Bill Harvey is a wellknown media researcher and inventor who cofounded TRA Inc and is its Strategic Advisor His nonprofit Human Effectiveness Institute runs his weekly blog on consciousness optimization Bill can be contacted at billbillharveyconsultingcomRead all Billamp8217s MediaBizBloggers commentaries at In Terms of ROICheck us out on Facebook at MediaBizBloggerscomFollow our Twitter updates MediaBizBlogger 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 MediaBizBloggerscom management or associated bloggers MediaBizBloggers is an open thought leadership platform and readers may share their comments and opinions in response to all commentaries amp160

Click to Make Your 2025 Contribution to Support the MediaVillage Education Foundation

Optimizing Networks -- Bill Harvey

Author

Publish date

Channel

Bill Harvey

Empowering Women in Media: Insights from Industry Leaders (Video) - By E.B. Moss

More Videos:

Click to Make Your 2025 Contribution to Support the MediaVillage Education Foundation

Optimizing Networks -- Bill Harvey

Enjoying This Commentary? There's More to Love

Bill Harvey

Empowering Women in Media: Insights from Industry Leaders (Video) - By E.B. Moss

The payment was successful

Cookies