May 8, 2017 AudienceScience

TV Advertisers Must Rethink The ‘Right Message, Right Person’ Approach

[This article was originally published in AdExchanger on May 8, 2017]

On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.

Today’s column is written by Michael Greene, vice president of product strategy at AudienceScience.

Despite delays and more than a bit of methodological controversy, Nielsen finally released its Total Content Ratings metric in February.

The spirit of bringing GRP-style measurement across screens is correct. Consumers have clearly fragmented in their viewing habits, not only adopting time-shifting via on-demand and DVRs, but also taking their TV content consumption to the smaller screens of smartphones and tablets.

With that in mind, it’s downright strange that marketers continue to use a media currency developed in a time when there were only three TV networks and computers were the size of a large room.

But marketers are suckers for nostalgia.

Like it or not – and I don’t – brands still build their media plans and advertising strategies around the traditional currency of TV: the GRP. In this landscape, it’s digital – with its reliance on impression-based pricing and CPMs – that’s disrupting a media model that’s functioned well for more than 50 years. As such, it’s no surprise that brands are increasingly demanding to plan and buy digital like they do TV. Digital publishers like Facebook, Snapchat and Twitter have also embraced the GRP as a currency to appeal to large, TV-minded brands.

The desire for an apples-to-apples currency for TV and digital planning and buying is well-intentioned. The divergence between digital metrics, which are based on impressions, and TV metrics, which are based on reach to audience demographics, does indeed make the media planning process onerous. I’m afraid, however, that trying to make digital buys transact more like TV buys is akin to forcing a square peg into a round hole, with actual sales results on the line.

The root of the problem lies in the profound differences between TV-style targeting and digital targeting. “Targeting” seems like a bit of a misnomer for what happens with TV advertising. Sure, you can skew TV ads to females 18 to 34 years old, but the inherent mass-reach nature of linear TV advertising means you’re also going to reach a lot of people outside that demographic.

This, in many ways, is a feature and not a bug. You transact commercially based upon reaching your target demo, but also get a lot of seemingly free impressions that reach other people who may in fact end up buying your product.

Translated into the digital environment, however, this feature becomes a bug. The one-to-one nature of digital targeting and increasingly accurate demographic targeting models mean buys will reach the demographic of your choosing and – if executed as planned – few other people.

All those bonus impressions and bonus product sales that happen via TV thus don’t happen in digital. This puts a lot of pressure on the demographic target to be highly predictive of sales (which it often isn’t), something that isn’t the case in a mass-reach TV environment.

So what should marketers and the industry at large do?

First, the industry must end the obsession with digital demographic accuracy. I know several brand marketers who give the same value to out-of-demo impressions as they do to impressions served to bots: zero. This is obviously ridiculous and moves digital measurement farther from TV-style measurement rather than closer, as it ignores reach and scale.

Second, we must also get ready for TV to start looking more like digital in the future. With connected TV adoption growing and Comcast, Dish, DirecTV and Sky UK beginning to move more of their TV content off the set-top box and onto the internet, there is a fundamental infrastructure to make TV truly programmatic and the commercial model truly impression-based.

This is bound to create an awkward transition phase, where the media owners and publishers on the content side must juggle two different buying models: GRPs and impression-based pricing.

Impression-based buying will win out in the long run. It gives greater monetization opportunities for publishers, which can now charge for all those previously “free” impressions, and more flexibility for advertisers, but the model still must evolve from the primordial mix we have now.

While all media will be addressable soon, targeting will never simply be about eliminating people from receiving an ad message. Advertisers must craft their different messages to appeal to various segments – reached either through online display, connected TV or traditional TV — with minimal waste.

The question is how do we build a revenue model around these ideas and build technology to accommodate both buying models? We’ve already seen major players take steps in this direction, with Comcast’s acquisition of FreeWheel and Adobe’s purchase of TubeMogul. Yet translating these metrics so that they work for both digitally savvy marketers and experienced traditional buyers will be a focal point throughout 2017 and likely beyond.

Digital marketers will likely pull back a bit on the concept of the “right person” as they begin to think about how to apply an appropriate message to larger segments, and traditional advertisers will think far more about how they can deliver more targeted messages across different segments, not just demographics.

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