After spending decades thinking big, TV executives are being asked to narrow their vision.
Madison Avenue is putting new pressure on networks to help find distinct clusters of audience, rather than merely barking out their ad pitches to the crowd at large, as has been standard practice. It’s a demand that threatens to redefine the economic foundation upon which TV has rested since the days of “The Andy Griffith Show” and “Dragnet.”
The dynamic surfaced definitively last week, with word that both Viacom and Time Warner’s large Turner unit have begun talking to select advertisers about new deals that center less on the number of people who see the spots as measured by Nielsen, and more on whether consumers actually react to the commercials. Turner has offered certain advertisers the chance to establish guarantees, such as lifts in brand recognition or purchase intent, on four of the unit’s cable networks — Cartoon Network, Boomerang, Adult Swim and TruTV. The new guarantees would be made alongside traditional measurements, like Nielsen ratings. Viacom, meanwhile, has begun talks with potential sponsors about assessing how audiences engage with content or ads. The effort could potentially involve agreements regarding consumer activity related to social media.
“The trend toward more data, targeting and insight against investments in television and video is undeniable,” said Christopher Vollmer, leader of the global media and entertainment practice at consultant Strategy&. “Agencies and advertisers are asking for it.”
And programmers are dishing it up in spades. Scripps Networks Interactive is offering data that’s more granular, supplied by Nielsen’s Catalina Solutions unit, which can suggest what shows are most likely to draw potential buyers of, say, Greek yogurt. CBS has tapped Catalina Solutions to help marketers analyze which places on the network’s schedule are the best for particular ads. Earlier this year, NBCUniversal offered to use data from set-top boxes and other sources to identify the best inventory for specific advertising categories across the company’s cable and TV networks.
The new efforts surface as TV’s annual upfront market, when networks sell the bulk of their ad inventory for the coming programming cycle, is about to get under way. In recent years, the broadcast networks have collected fewer advance commitments for their primetime schedules, and in 2014, cable saw ad commitments fall for the first time in a number of years — all as marketers devote more energy to new venues like social media and mobile devices.
To be sure, TV still swings big. Many of the smallscreen’s truly outsized draws, like the Super Bowl and episodes of AMC’s “The Walking Dead,” have demonstrated an ability to register increases in the size of the audience tuning in. But an irrevocable splintering in TV viewing has taken place, due to the rise of a dizzying number of new ways to consume video. One fan of, say, “Gotham” on Fox might watch the show via digital video recorder four days after it airs. Another might stream it a week later as part of a binge-watching session on a mobile tablet. And then there’s the crowd watching it live. The true audience for a particular program has become a hodgepodge of groups that consume it in very different ways.
As TV audiences fracture even more, marketers who frequent digital media have become accustomed to using IP addresses and Web-surfing behavior to gain a better sense of their viewers. And if such measurement tools are available now, the reasoning goes, there must be a better way to go after car buyers than simply running an automobile ad on “American Idol” and hoping enough of the audience is in the market for a new vehicle. With more TV programming being streamed, advertisers want to import to the boob tube — or whatever replaces it in the years to come — more of the precision they get from digital media.
The twist represents a reboot of sorts for TV advertising. In the 1960s, ’70s and ’80s, advertisers sought — and got — a way to measure the broadest possible TV audiences. Relying on Nielsen tabulations of how many people tuned in to a show, and, later how many watched a commercial break, seemed to do the trick.
With those Nielsen measures dwindling, networks want to be judged on new criteria. Earlier this year, NBCUniversal’s CNBC announced that before 2015 was out, it would no longer use Nielsen measures for its daytime business-news programming. Advertisers would have to rely on new data that surveys the most intense viewers of the network.
The next challenge? With CNBC measuring its audience one way, Viacom another way and Turner yet another, advertisers may have too many yardsticks at their disposal, and no reliable unified metric to use as a comparison. Just as ad agency drama “Mad Men” is preparing to fade, so too are many of the industry’s old standbys.