Commentary

Answers To Some Great Questions About Outcome-Based TV Ad Selling

  • by , Featured Contributor, August 16, 2018
The following was posted in a previous edition of Media Insider.

“How can anyone promise sales outcomes -- and then also work with your competitors?” That was one of several questions posed by Joe Marchese recently on big industry stages.

Joe, president of advertising revenue at Fox Networks Group, is not shy with opinions, and has emerged as one of the strongest voices for change in the advertising industry.

He's also not alone in his criticism of recent trends to sell TV ads based on marketers’ desired business outcomes, not just traditional media delivery metrics like gross rating points and cost per thousand.

Specifically, Joe asked how a TV company could sell outcomes to competing advertisers -- and also, whether it’s really possible to provide true attribution for sales of some products. In particular, he questioned the validity of whether any one spot or campaign for a car can really be tied to specific short-term sales of that car.

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I’m sure you all might have opinions on what the answers are -- but here are mine:

Outcome selling does not work for all consumer categories. There’s no question that TV advertising’s ability to drive attributable short-term sales varies widely from category to category. With large-scale databases of person impression-level TV set-top-box data, it’s quite possible to have very accurate attribution for retail sales of consumer packaged goods, and be able to predictably sell those outcomes.

The same cannot be said for high-ticket, longer-term considered purchases like cars and trucks. I don’t believe that category will be very easy to attribute or sell on outcomes.

Selling outcomes to competitors means they bid up ad prices by results rather than opportunity to be seen. Selling outcomes is not how most TV companies like to operate, but that doesn’t mean you can’t sell outcome guarantees to both Walmart, Kroger and Amazon at the same time.

In the future, all TV companies must do so. It’s how Google and Facebook operate, and how they drive such great profits. They sell marketers want they want -- results -- with little risk. Those companies bid against each to get those results and keep those “acquired customers” away from each other.

That means higher prices and more inventory yield for the media owner. Adopting a performance-pricing model over time is a good thing for TV.

There’s no question that embracing outcome-based selling represents a difficult transition for TV companies. It requires different metrics. It is typically a client-direct sale. It requires different types of sales skills and sales personnel, and different accounting.

This change will be wrenching, but the end result will be good. TV companies will get much better prices than they do today, since they will be fully valued for their contributions to sales and will reshape all pricing, packaging and inventory allocations for maximum result.

This won’t happen overnight, but it will happen soon. What do you think?

2 comments about "Answers To Some Great Questions About Outcome-Based TV Ad Selling".
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  1. Robert Barrows from R.M. Barrows, Inc. Advertising & Public Relations, August 16, 2018 at 3:56 p.m.

    There is actually a very easy way to solve "outcome and attribution" questions. I have developed some very easy-to-use advertising math that can help all kinds of businesses make their advertising much more effective.
    The math will let you take a lot of the guesswork out of your advertising, and you can use the math to help you test and measure and plan your advertising copy and media much more effectively and much more efficiently. The math is called "The Barrows Popularity Factor" and it is extremely easy to use. All of the math can be done by one person, in moments, with just a simple calculator. You can read more about "The Barrows Popularity Factor" online.

  2. Ed Papazian from Media Dynamics Inc, August 17, 2018 at 7:39 a.m.

    Dave, FB and Google are selling mainly to direct response not branding advertisers. It's one thing to attempt to guarantee results to a DR advertiser ----like having that advertiser pay only for a clickthrough in a "search" operation, but guaranteeing that a particular person will have a better opinion of a brand because of an "ad exposure" on TV which, at a later date and in conjunction with prior exposures on that TV network, other TV networks and magazines, radio, digital media, etc. eventually influences a sales result is quite another thing entirely. Even with DR ads on TV I seriously doubt that the sellers will provide the kinds of results guarantees that are meaningful as they have no control over the ad's content and message and certainly no control over the quality of the product, its distribution, packaging, etc. Certain, vague guarantees, based on prior experience with similar products might be possible but these would be very conservatively defined to protect the sellers and be virtually useles to the marketer. As I keep pointing out, we can't just lump direct response in with pure branding campaigns as if they perform in the same manner as regards goals and desired outcomes. Advertisers have to accept the rsponsibility for their ad campaigns performing well or poorly. If the latter is the result, fire the agency, not the media seller.

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