Disruption is swirling around television. To its credit, the television industry doesn’t have its collective head in the sand. But many of the people inside the television business aren’t getting a clear view of the future, in part because the standard television industry posture is to peek through its collective fingers at the scary monster that is ad tech. It’s understandable to fear change, but it’s important to remember that knowledge is the best antidote for fear.
There are signs of progress all across the industry. Content companies like like NBCUniversal and cable providers like AT&T are experimenting with digital sales strategies and tools. Meanwhile, the Global Audience Based Buying Conference (GABBCON) has brought together a working group of content companies, ad tech firms, and agencies to develop technical standards and best practices that will lay the foundation for the future of buying and selling television inventory. But despite a widening conversation, many in the television industry aren’t satisfied with the answers they’re hearing; the problem is that in many cases, we’re addressing the wrong questions.
Nothing confused the marketplace more than attaching the word “programmatic” to new advances in television advertising. For the television networks, fear of the race to the bottom for the going rate of their prized inventory has led to a “not on my watch” mentality.
At the same time, for digital people, the word “programmatic” implies that television could be automated to simplify ad buys that have previously been placed via large binders or spreadsheets moving between multiple companies and systems. Yes, improvements in TV order management and trafficking will come over time, but simply automating and speeding up the process from purchase to broadcast only addresses a sliver of the problem.
What we should really be asking is how can we update the TV advertising model. The fundamentals of television ratings haven’t changed in decades. As a consequence, the value of the medium has remained the same because the amount of inventory and the yield from have inventory have both grown linearly.
But in the last two decades, the world outside television has seen an explosion in the amount of available audience data and incredible innovations around measurement. The questions the television industry should focus on are how it can integrate advances in audience data and measurement into its existing sales structure, and how those integrations can yield a greater return on content.
Addressable TV advertising arose about the same time as the word “programmatic” took off. As a result, non-TV people confused the efforts to make TV “programmatic” with the technology to make it “addressable.” But these two concepts do not go hand in hand.
Addressable TV, or the ability to show different ads to different households while they are watching the same program, is still limited to a small fraction of TV inventory. To start, the only addressable inventory is the two minutes of every hour offered on local cable.
(That’s how the restaurant down the street bought time on your favorite basic cable drama). In addition, your addressable audience is limited to a list that can survive a double-blind match with the multichannel video programming distributor (MVPD). While the technology exists to offer every network on the program guide the ability to target every ad they serve, the sales teams at the MVPDs have shut this down over fear of cannibalization. Of course, the operative word there is fear, which in this case is a function of asking the wrong question.
Rather than focusing on addressable TV as the only way, marketers need to take a step back. Targeted advertising is still a possibility on TV. As a digital marketer or publisher, you are likely sitting on all sorts of data that you can use safely to deliver the right message to the right audience. Applying that information to a linear television buy is possible, provided that you work with a partner that’s thinking creatively about reach.
Where the television industry has been making strides in recent years has been creating audience packages that utilize advertiser data to find the right programming on television for your target consumers. Instead of holding out for the day when TV ads can be directly targeted at scale, you can apply your TV ad spend in a smarter way by seeing the linear TV that your first party consumers are watching at scale. Yes, some advertisers are skipping TV altogether and looking to digital—perhaps that’s why marketers have indicated that increases in digital video spending will come out of TV budgets — but the point is that they don’t have to do that. In fact, they can buy specific television audiences at scale if they ask the right questions of the ad tech industry.
This article was written by Ryan Reed, Director of TV Solutions at Lotame, and originally appeared in Broadcasting & Cable.