Swimming Against a Slow Tide: Perspectives on the Future of Television
Bryan Noguchi, Senior Vice President, Media Director
A recent survey of media sales executives, fielded by R2C Group, gauged how the industry views the evolution of TV and the transformative trends and technologies that are in play today. The respondents ranged from television sales professionals to those representing digital and print properties. In addition to ranking some key topic areas, respondents were encouraged to provide opinions on a variety of topics, including programmatic buying, addressable advertising, and ratings declines. While (spoiler alert!) none of the findings are going to overturn the perception or direction of the media marketplace, we did find a lot of the verbatims to be quite telling and the hostility towards the idea of programmatic TV buying is actually sort of palpable. I had the opportunity to discuss the findings at a panel discussion which included a few of the survey’s media sales respondents. They represented a broad spectrum of cable networks, digital DSPs, display ad tech, and next gen video platforms, and I was fascinated at the diverse perceptions of the evolution of media.
Programmatic TV: No Two Definitions Match
The biggest issue around programmatic TV seems to be that depending upon who you ask, the definition of it varies quite a bit. To tenured, seasoned TV sales veterans the term evokes images of open ad exchanges and real-time bidding – things that devalue inventory and ultimately kill sales jobs. Interestingly, to the digital professional’s eye, this evokes more of a “fair market value and labor efficiency” image. And to the shrewdest players, programmatic looks like an opportunity to maintain and automate control over inventory, price and distribution. Regardless of the camp you fall into, the general consensus with regard to programmatic TV is that we’ve got a little bit of a wait ahead before it really takes off – like an “as much as five years” kind of wait. Also of note is that when it does take off, it may not look much like what we’ve come to expect from our experiences with digital programmatic.
Despite the pessimism above, there are still a bevy of players out there who purport to offer programmatic solutions now. If you speak to the cable and broadcast networks providing them, the definition here seems to be more about the facilitation of connecting inventory to buyers within the controlled environment of a private exchange. While third party players seem to be brokering in local cable inventory or operating in the scatter market (almost indistinguishably from traditional media agencies) and with the occasional differentiator being that they may also offer advanced targeting technologies or enhanced data overlays.
The latter is interesting as both set top box and smart TV data are starting to surface as an intelligence offering and this evolution may be an early preview into the data source menagerie that could be unleashed by the FCC’s considered de-monopolization of cable boxes.
Is More Data Better?
There’s a trend we’re seeing among advertisers where there’s an expectation that greater granularity of marketing data equates to increased effectiveness, and while I’m sympathetic to this, it’s not clear to me that truly revelatory insights consistently live in the additional layer of tea leaves. By way of example, I’d point to the early days of digital display advertising where we’d inundate clients with tons of campaign placement level information, but (rightly or wrongly) all eyes would gravitate to click-through rate, which ultimately became this horrific proxy for every objective under the sun. Agencies are as much to blame with regard to this history – reams of data became a smokescreen for their inability or unwillingness to make the appropriate connections between objectives and measurement outputs. To me, this underscores the fact that more value is derived from the management of data versus the sheer volume of it. So, as front end data appends become more common and more economical, the primary challenge will be how to ensure that those front-end appends can be normalized in order to provide useful aggregate views and that as the backend outputs grow in volume and complexity, we’ll need to take care that data volume doesn’t become the end unto itself.
Handling the Influx
This leads me into an area in which I have only limited personal acumen, but I am lucky enough to work in an organization with deep expertise and a good set of proprietary management tools. It’s clear to me that the future of advertising rests largely in how we address the fact that more emphasis needs to be put on how we manage and interpret the data that both informs and is created by our campaigns, but also by the fact that our potential sources of data are about to balloon as a result of the output of smart TV’s and privately owned STBs. New kinds of information promise to grant unprecedented marketing power, but only for those who can process it and effectively separate wheat from chaff. Many of my current and future business decisions hinge on this, but I’m curious to know: what’s everyone else doing on the data management platform (DMP) front?