TV’s Drive Towards Data: 3 Challenges (Guest Column)

TV’s Drive Towards Data: 3 Challenges

Data-driven insights in the TV industry continue to gain momentum among the big networks and advertisers alike. This year, data picked up steam during the Upfronts and stayed strong as a theme throughout discussions at Cannes, with companies like Viacom getting aggressive about targeting through supplemental measurement and agency buyers reveling in results they’re seeing so far with programmatic TV.

The drive toward data in TV is now unstoppable. As technology and television consumption habits continue to evolve, the rich “person-level” insights becoming available through set-top boxes, connected TVs and other sources of data are opening the door to more precise, audience-focused targeting.

It’s a welcome change. The TV industry has traditionally been slower than web in adopting emerging advertising technologies, so it’s exciting to see programmers and distributors starting to take things like audience buying and addressability seriously. But, there’s still work to be done before the category is truly data-driven.

Here are three challenges that, once solved, will make TV’s transformation complete:

1. Scaling addressable TV. Using data to drive better targeting of TV audiences requires automated technology that can quickly and seamlessly leverage the enormous information assets available to marketers. This can’t be achieved with planners and buyers relying on manual processes and rudimentary, spreadsheet-based analysis.

Enter programmatic buying.

New streams of data from set-top boxes, connected televisions and OTT devices and the capability to match that data to person-level consumer data provides the rich, granular data that enables advertisers to target, optimize and measure TV advertising programmatically. Advertisers can programmatically purchase specific audience segments and predict outcomes of their media spend. No longer are we restrained by the dependence on demography and latent survey-based consumer behavior indexes to assign value to trade and measure the performance of TV advertising. The challenge, however, is in establishing standards around these new capabilities and data sets to scale programmatic TV industry-wide.

Then there’s addressable TV. According to eMarketer, addressable TV “remains a very small fraction of the overall TV market,” as major technology hurdles still exist across cable companies and operators working to incorporate capabilities into their infrastructure. Pressure from advertisers that want better, smarter buying is driving innovation. Some 40 million addressable TVs are anticipated by 2016, up from 12 million a year ago. There’s no need to wait: addressability is not limited to household addressable advertising delivered at the set-top box. The technology platforms in market today unlock the opportunity giving marketers the tools to make TV a precision marketing instrument – at scale, today, with programmatic TV.

2. Adding transparency. Can advertisers trust what the data is telling them? Trust requires transparency – about the origins of the data being engaged and the methodologies used to analyze it. It also means an accurate and unbiased assessment of the results.

It’s a challenge that originated with digital media buying and has migrated to TV. Today, only 31 percent of buyers believe transparency has been “sufficiently addressed” online. Many programmatic tools are “black boxed” and ROI measurements aren’t accessible to agencies and advertisers. The same challenges apply to programmatic TV.

Like scaling addressable TV, increasing transparency in data-driven and automated buying is a long-term effort, made possible by better technology. Those in the forefront of programmatic advertising are responding to the concerns of marketers with more open and customizable platforms that allow for integration with other systems while providing deeper segment preferences via CRM-esque dashboards and tools for TV.

In the next year, as programmatic TV scales, the platforms that demystify automated buying will win the day. Greater transparency only means greater insight and more effective campaigns.

3. TV attribution in a cross-channel world. In a multichannel universe, data is blurring the lines between TV and digital, between mobile and display, and even between direct response and branding. It all comes down to the individual people – whether the screen they’re looking at is on their wall, at their desk or in the palm of their hand. New technology enables advertisers to understand how TV and other channels are working collectively to drive desired outcomes.

But combining disparate data sources from multiple channels creates an attribution problem for TV marketers. How can TV buys be evaluated alongside display, mobile, direct mail and other channels in a way that’s accessible? How accurate are the metrics, given the level of overall variation across mediums? These questions have stalled true cross-channel analysis, with most marketers still evaluating media individually rather than as part of a complete, connected, cross-channel strategy. In fact, only 6 percent of marketers are doing the latter.

Fortunately, innovations like multi-touch attribution software and machine-learning platforms are breaking the barriers to cross-channel attribution so that brands can optimize and execute more effective and engaging campaigns wherever and whenever their audiences are found. While it’s still early days, the capacity to measure the success of TV advertising in relation to other media is only getting better.

And, ultimately, that’s where both marketers and media companies are headed – allowing data to better understand the true value of media and advertising. It’s why data took center stage at some of the industry’s biggest events early this year, and will continue to be a huge part of conversations in negotiations moving forward. To reach the next level of TV monetization, we must meet these challenges.

Dan Ackerman is senior vice president for programmatic TV for Adapt.TV, an AOL Platforms company.

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