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Changing Channels - A Look Into the Shifting TV Advertising Landscape

April 30, 2018

Advertising, like many other industries today, faces an age of uncertainty.  Rapid advances in technology give brands more options than ever to tell their story to consumers, who are changing how and where they consume media.  While this phenomenon is altering the media landscape as we know it – channels like TV that account for the largest advertising investment face the greatest changes.   

Here is a brief overview of what has changed for TV recently:

This quote from Conan O’Brien below sums it up quite well:

"I think the linear versus digital thing has got to go away and you have to realize that it’s all one piece.”

Consumer viewing habits are rapidly changing as are the ways in which TV content is delivered, and digital data streams are providing publishers and advertisers with ability to target more precisely than ever.  With so much more information, it is very easy to get lost in the numbers.   Misinterpreting the data is another risk; tactics with great test recaps and trends are simply not always that effective when run at a larger scale.  Now more so than ever, having a neutral partner to chart the way through this sea of data, prepare necessary tactical adjustments, and provide updated strategies that make the most of your media campaigns is absolutely necessary in 2018.

Those who work in TV advertising know digital convergence is nothing new, but finding a way to measure it all continues to evolve.  In 2017, the primary way of transacting media was through metrics like age/gender-based CPM or CPP, but that may change as soon as the 2018 upfronts. Media measurement companies, like Nielsen, which have been producing age/gender viewer estimate surveys since the 1950s, are starting to move towards deeper audience measurement/targeted models of digital advertisingThus, targeting audiences most responsive to your message at scale is key to driving sales, and having the tools to target them on TV across multiple data points is crucial.  Additionally, having a cross-channel approach backed by data will become more critical as media continues to fragment.  Simply knowing things like whether people are more receptive to your message while at home or not can be key to driving conversions and creating a media plan that works best for your brand.  

While Nielsen and other measurement companies are struggling to provide a better idea of how TV is being consumed, technology companies are rolling out ACR data streams.  The automated content recognition chips in smart TVs and Alphonso-enabled mobile device apps have started to provide second-by-second viewing data, which until recently, was not available.  ACR data paired with IP attribution via ad analytics services, are finally starting to provide reliable TV conversion data.  This data will provide the ability to see performance of the campaign in real-time that can be cross-referenced with other important data points like site analytics, search, and media running on other channels.  TV’s missing link of attribution is now ready to be completed, and we will enter a new phase of accountability to plan more effective media strategies that drive actual results instead of good metrics on paper. 

The below chart highlights how data has changed the process for establishing the optimal media mix:

Source: Bain & Co.

As the share of households using connected TV devices and digital video grows, much more data will be collected about those viewers.  How we acquire and manage that consumer data has come under scrutiny of late, and will likely remain an issue in the upcoming years.  GDPR legislation is now active in the EU, and the FTC is probing data misuse by Facebook, Google, and other tech companies that handle consumer data.  The Advertising Research Federation and IAB have released guidelines for navigating the new privacy policies.  We do recommend taking advantage of the data available now, and testing attractive new media types to determine the best approaches for your brand in the connected TV landscape. 

The Nielsen chart below from a 2017 Total Audience Report shows how people are using a variety of devices.  However, these days there is now a 64% penetration rate for connected TV devices.  As more households migrate to these devices, live TV viewing will continue to be impacted.

At MBuy, we are changing our plans to reflect the broader changes in the TV market - looking at video in a holistic way for a while, tying in analytics data with a cross channel approach (TV, radio, out-of-home, and/or digital).  By focusing on reaching people when they are most receptive to messaging, we are able to leverage a rapidly changing media landscape to reach our audience on every possible channel.  We are truly data driven and obsessed with optimization - check out how our EMP (Everychannel Management Platform and advanced TV buying capabilities are built to handle multichannel buys that will power your brand into the future.  Is your brand ready? Visit our success stories page, or click here to reach us.

Oliver Harper

Senior Media Buyer, MBuy