Commentary
When TV And Digital Merge, Good Things Happen
- by Cory Treffiletti , Featured Contributor, October 5, 2016
Most of the foundational elements of advertising today are setting the stage for a digital, addressable, television landscape. At the core are data and cross-device methodologies.
Much of the online landscape is still, rather surprisingly, based on third-party and first-party cookies. Mobile has some capacity for cookies, but is mostly based on device IDs. The TV landscape will be dependent on device IDs since cookies don’t work on set-top boxes, cable boxes, or TVs themselves. The methods for cross-device are applicable in this environment and will be a necessity for identifying and recognizing customers and what stage of the journey they may be in when they’re exposed to an ad in that environment.
Ad serving is also going to be challenged and refined in an addressable TV world. The commercial format is still the basis for advertising on a TV, and local boxes will need to be the launching point for addressable commercials. The local box or platform will need to identify, recognize and determine which commercial to serve up rather than calling from a remote location and serving it up over the Web. I foresee a technology where IDs are anticipated and commercials are served in the background, to be cached locally and called up at viewing. That means the local box can have a slew of commercials at the ready, and they can be delivered faster.
Being able to view the entire digital media landscape in one interconnected campaign is going to be powerful for marketers. Identifying and recognizing the customer and delivering a personalized message across online, mobile, TV and even digital OOH and in-store will create a truly addressable, customizable media experience. This makes attribution and measurement more accurate and provides marketers with the tools to optimize campaigns in a more efficient manner.
When this happens, the question remains: What happens to the upfront?
I think the model of upfront buying will still be important, but at a corporate portfolio level where larger conglomerates are able to purchase media in advance and optimize allocations based on the portfolio of products they represent. From Viacom and Time Warner to Clorox and P&G, this creates a new way to manage media that drives efficiency even further than in the past. When one product is not making good use of the media, another can be slotted in to takes its place and maximize the upfront allocation.
I for one am truly excited about the combined digital landscape, which I predict will be the case in just four short years. Today the numbers I’ve seen are that between 15 million to 17million U.S. households will be digital-TV-enabled by the end of 2016. I assume progress to speed up over the next three years, delivering the kind of experience I, as a marketer, am truly looking forward to.
Are you?
Love the vision and I look forward to it as well. My understanding is that addressable TV will continue to be limited short term by the churn rate of older boxes being replaced by newer boxes that can serve addressable TV spots. From what I've seen cable TV has about a 10% churn rate. As it grows, hopefully the underlying cost will also go down, because right now the incremental cost of targeting requires the target audience to be somewhat narrow in order to remove enough waste to make financial sense.
No. It doesn't matter to the viewer. But being tracked does. DO NOT TRACK. With every movement towards, the sentiment grows. 1984 and find your illegal depending what happens in November.
This sounds more like a nightmare. Consumers are getting more and more fed up with tracking. A quick look at the mess and distrust digital has caused should be a cautionary tale. As David Ogilvy use to say" The consumer is not a moron they is your wife (or husband)". The media has to treat the consumer with more respect. It is a two way street. If this is the way media will go, it will create a new business to block all this tracking.
Mark, I beg to differ. When people see more relevant content they become more accepting of the messaging. As long as tracking doesn't equal personal identification, what's the issue? I know there are those that say they don't want big government or big business to know everything about them, but if you're worried about that I'd say you're giving them too much credit. Just my humble opinion.
Yes, there will have to be strict rules and penalties to protect against theft and fraud. But if you think thieves don't already have enough information to steal what little data you've given up already you're fooling yourself.
Data is becoming the new currency. We pay for content on the free Web with our time and information. I foresee systems and safeguards to minimize risk but allow for greater freedoms as we evolve into a newer, more mature digital age.
Jared, my question continues to be "relevant to whom?". The massive spikd in ad blocking coincides with agencies believing they have figured out how to deliver what's "relevant" to the consumer. This indicates that consumers haven't found it relevant.
I look no further than my Amazon recommendations. Over 10 years only once or twice have they been "relevant".
That leads me to conclude that "relevant" means that the consumer is relevant to the advertiser or content creator. And there's a HUGE difference that doesn't bode well for digital.
I read this originally and decided to come back to it and respond. The convergence of TV and Digital that Cory speaks of T is a foregone conclusion because of the way the FTC is talking. They seek the death of the expensive, unfriendly cable and sat box control. Their recent statements noting the preliforation of SMART TVs, devices and phones via apps, they are working with the industry to deal with authentication, priracy and content control. Additionally, i think the MSOs should be eager to adapt, otherwise people will just build more stand alone relationships with creators, eg HBO Now, CBS and ESPN, or the Cable/Sat providers will be like a record store (remember those?)
Additionally on the digital ad front. Converance is a good thing, not only for buying consolidation but for measurement and audience scale. This move will stablize the digital industry revenues essentially into one type, video. Graphic ads, because they are crap creative are doing no one a favor, brands or consumers. Video is the medium that brands, agencies, consumers and content publishers can live with for all the creative, distribution, marketing, scale and revenue, so media can live in peace and harmony for another few decades.
I welcome conversation on this.
Ned, regarding the theoretical "emancipation" of the consumer that is implied by the death of set-top-boxes, even if it comes true and many consumers try to reap the supposed benefits of "unbundling", many of them will find that they have only very limited choices of "quality" content available to them on an a-la-carte basis. Why? Because quality content, in a meaningful scale, takes much expertise and a great deal of money to provide and unless some new and as yet unproven business plan can be developed to provide the required financial incentive for the producers the amount of HBO-style fare will be inadequate for many consumers. Sure, you may have access to a few trendy sitcoms or some "edgy" dramas but not even remotely to the extent that now exists thanks to ad supported but bundled content, which later fuels many cable channels and SVOD services in rerun form.