Commentary
Cleaning The Dust Off TV Preconceptions
- by John Piccone , December 19, 2014
But now it’s time to get out the feather dusters. TV is about to get its groove back, and the shine will be blinding. Here’s why:
Unlike with digital media, advertisers’ ability to value the direct business impact of TV has been vague. The correlation of gross rating points to sales is a good enough placeholder, but it’s big and round and sedentary and collects dust, while digital media measures move fast and keep changing, staying shiny along the way. Digital media also remains shiny by providing access to planned target audiences. This combination of seeing who does what, and then who buys how much, allows planners to see the impact of their target audience selection and optimize accordingly. TV uses the dust-laden history method of using demos for much of its purchasing, so the momentum remains slow.
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This notion of optimizing digital media and audiences against advertiser sales is so standard that to bring it up as a unique value proposition is laughable. It’s a commodity feature, and it’s why digital advertising works. TV now has the ability to do make a similar link, but different in that the scale is so much more powerful. The result will be a dramatic restructuring of the business structures that buy, plan and sell television advertising.
Unlike digitally focused agencies, where the planning and buying can be done within the same group, the planning and buying functions for TV are housed in different teams, floors, buildings and even companies. And unlike digital, where there is one language for both planning and buying to measure advertising’s impact, TV has two languages. The TV planner’s language is focused on audience attributes such as behavior, demographics, psychographics and sales and the foundation of the buyer’s language is cast in demographics and pricing based on CPM.
As better TV data – on viewership, targeting, and audience characteristics -- becomes available, and the market gets better at protecting, managing and using it, more advertisers are matching their sales with television viewing data to show the impact TV advertising has on sales. This in turn allows for better analysis of how ad spend works against specific target audiences who have been exposed or unexposed to their messaging. Deeper insights such as TV’s impact on gross sales, basket sizes, number of store visits and heavy/light shopper activity are coming to light, forcing marketers to rethink the connection between TV and digital media on business outcome.
After over a decade, TV advertising is back on a level playing field with digital advertising in understanding an advertiser’s return on ad spend. The impact will be profound. Planners will now be able to see what audience attributes are responding to which creative, and be able to optimize their audience selection based on sales data. Buyers will be able to apply the outcomes of the media they buy to make decisions based on more than just CPM pricing metrics. And lastly, sellers will be able to expand the yield on their inventory by translating demo-based packaging into purchase-based insights.
Make no mistake about it, the dust is blowing off TV and it’s about to… ah ah choo! (sorry, there is a lot of dust in the air). TV is about to prove its value in a big shiny way.
John
I could not agree more. Although the dust may be as thick as dirt in a diamond mine, a true and perfect Diamond is forever and never looses its appeal. TV and Digital will only benefit each other for those seeking true audience measurement based on advanced insights into consumer behavior.
How much dust can really come off with the ever growing audiences of SVOD, specifically Netflix and Plex? In TV, smaller audience equates to greater and expensive ad spend- how much dust can really be cleared?
Okay, maybe so, but how are these measurements linked to TV ad spend? In other words, what has changed in measurement activities (basket size, store visits, etc.) and their analysis with respect to TV spend?
Behavioral measures in the online world are directly linked. Measurement of TV has always been indirect, so what has changed?
Thanks.
The fact that TV audiences are now split up among many more channels does not mean that you can't get mass reach via TV. Just spread out your buys. Simple. As for rising TV CPMs at least TV delivers its ads in their entirety to audiences---giving those inclined to do so a 100% opportunity to watch the commercials and get a complete start to finish message. Until "digital" cleans up its viewability mess, it can't hope to compete with TV either in audience size or audience delivered CPMs. The best outcome is for the two media to work in tandem, not in competition. Hopefully, this is obvious to most marketers, despite "digital's current problems.
Joan- Thanks to availability of deeper content and advertising viewership data on TV, it is now possible to anonymously link this activity to purchasing behavior. As this "first party data matching" becomes the norm it will be easier to see the role of reach and frequency on TV to cash register receipts.
Thanks a lot. Do you of any white papers that cover "first party data matching?" I'll do a search and contact Nielsen as well, but if there is something else out there, I'd appreciate knowing about it. Joan
Like the broad strokes of this. But one key thing we need to realize is that all this digital measurement only gives the implication that we really know things deeply. The truth is that TV measurements of audience (in traditional brand) or of phone responses/estimated web responses (direct response TV) are quite valuable when used wisely. So if we look at both digital and TV media, the truth is that measurement tells a part of the story but large parts aren't able to be fit into those near-term measurements. Does that mean TV needs web-style measures? I'll suggest not. The shiny bauble of web measurability is heavily driven as a perception by investment money. But the true reality is that web measurements are pretty good if your brand lives only a digital life. They're pretty poor if your brand lives a life in the real world of omnichannel. And all this new data you mention? I'm cautious - a caution we should have learned from web measuring. All those shiny, cool web measurements turn out (far too often & perhaps most often) to be merely shiny piles of data - not insight that drives profitability or product and brand success. We should all approach those claims of "strong measurability" with a healthy skepticism. For example, online now brands can target their advertising so effectively that they can completely kill their brand quite quickly - by believing their own hype about targeting.
Gees, I'm so old that I remember when marketers used to focus on "building brands" and let the sales people sell stuff. I can't help but think that this is a race to the bottom of the purchase funnel. I remember in the late '90s when I worked in an agency the head of marketing asked me to extend the econometric models we had of their brand to establish when they should stop advertising on television and advertise on other media - or as she put it ... find out at which spot in schedule do we start getting declining incremental reach and introduce 'wastage'. She was flummoxed when I said I already knew the answer - the second spot. Every spot after the first spot will have some duplication which in her parlance was 'wastage'. Well the model now seems to have been inverted be to find the most infinitely targeted online ad at the lowest CPM ... the one right at the very bottom of the funnel. Reduction is message weight will eventually empty the funnel. I recommend people get a copy of Prof. Byron Sharp's 'How Brands Grow" and read it (no, I'm not on any kickbacks). Be prepared to mumble and grumble "that can't be right" ... or "no way". Once you've finished it ... go back and re-read those parts and be prepared to say "well he's right ... that makes sense". I summarise it as building a bigger funnel rather than optimising a smaller one.
One thing I find so amusing about all of the "data-driven" schemes to vastly improve media planning and buying is that most of their ardent advocates never seem to look at the data----they are enthralled by the concept of data-----tons and tons of it, cut into tiny, "granular" bits-----offering solutions that mere humans could never come up with by themselves. In reality, we already know most of the answers, we just don't express ourselves like sterile computer printouts. Common sense is the solution to most of our media---and other----problems.
John - You make a great point. Closed loop insights is merely a means to an end - with the end being better target audience identification. TV's value will remain as the best means to reach target audiences at scale (top of the funnel).
Thanks John. One of the points that Sharp makes - that sounds completely counter-intuitive - is that massive brands (the ones that are number one in markets all around the world) don't precisely target their communications messaging. The logic behind this is that in order for the brand to grow (i.e. to increase their market share) they need to continually add new users - in order for a person to become a brand loyalist they must first become a user. So a CPG brand may expand their target audience from Female Main Grocery Buyers Aged 25-54 with a Child, to All Grocery Buyers or People 18+. While the former may be their sweet spot and may produce the most cost-efficient campaign, the next brand loyalist with 'lifetime value' that will increase long-term brand share will probably come from casting the net wider in order to influence consumers who didn't themselves even know that they were in the category! While this sounds paradoxical - and why I had to read and re-read the book - when you take the long term view and weigh up communications effectiveness over communications efficiency customer lifetime value comes us trumps. Without giving everything away, you should read where advertising sits in the rankings in the marketers toolkit. Ponder this - big brands have the widest distribution, and distribution is WAY up there in the key drivers of the biggest brands. It makes sense - the more you can get your product (not brand) within touching distance the better chance you have of clinching that sale.