Addressable, programmatic, OTT, data-driven… with so much confusion surrounding the emerging forms of linear TV advertising, Dave Morgan, CEO and founder of Simulmedia, offers his take on where there’s smoke, and where there’s fire.
What’s Smoke and what’s Fire? List of 5 Things you need to know about Emerging Advertising
The months of April and May roll around every year and every year dozens of new, “big ideas” emerge fighting for the attention of marketers and media buyers as they engage in the TV Upfronts, forming decisions about billions of dollars of TV ad commitments. With each new new thing, the same questions arise: Is this for real? Will it matter? What does it do well? What does it lack?
Here are 5 “hot” forms of Emerging Advertising in the headlines today, with some quick analysis to help you decide what’s smoke and what’s fire.
1. Streaming Video is Eating TV. Jump in with ads now or forever lose your place.
There is no question that streaming video is hot, and that consumers today have so many more options for watching premium video than ever before, from traditional linear TV over cable, satellite or old-style antenna, to Netflix, Amazon Prime, Hulu, Sling TV. Literally dozens of upstarts include recently announced premium video streaming on YouTube TV, Facebook TV, Snapchat and Twitter.
Big question: Is this the time to be like Anheuser-Busch media legend Chuck Fruit when – in 1979 – he signed a long-term deal with ESPN to be its exclusive beer sponsor?
What it does well: Streaming services are amassing users. They own the headlines and mindshare. They look indomitable over time.
What it lacks: Ads. Most premium video streaming services today, particularly those with TV content, have no ads or very few ads. For sure, the emerging services from Hulu, YouTube, Facebook and Snap will have more and better ad loads.
Grade: Lots of smoke; some fire. Essential to play in this space today.
2. Artificial Intelligence is ready to take over marketing and advertising.
Everywhere, folks are talking about how “AI” is going to change our lives. In our industry, many are saying that artificial intelligence will take over everything from media selection to creative development to account collections.
Big question: Is Artificial Intelligence really here? Is it any more meaningful than VR – “virtual reality” – was two years ago when everyone was talking about it?
What it does well: AI is great at capturing our imagination, and no one has done that better than IBM’s Watson, though Alexa from Amazon and Siri from Apple are pretty visible too. It is long on potential.
What it lacks: AI won’t change the ad game anytime soon. Most of what we see in AI or hear about it is either already being done – most of today’s ad servers use machine learning (the underlying technology of AI) in their predictions and ad optimizations today – or are years away. Alexa and Siri are really about voice recognition and automation, not so much AI.
Grade: Too much smoke; very little fire. Focus more on today’s VR that matters, “voice recognition” – that’s the two-letter acronym to jump on board today.
3. Addressable and Programmatic TV advertising. Finally here at scale.
We’ve been hearing for decades that our TV ads would become personal and addressable. We’ve also heard over the past three years, that we’ll be able to buy them through interfaces, dynamically and auction-based like Wall Street trades stocks, programmatically.
Big question: Are addressable and programmatic TV ads finally here at scale?
What it does well: AT&T/DirecTV, Dish, Altice (Cablevision) and Comcast on the sell side and Modi on the buy side have been proving out the power of addressable TV ads for years, and have proved out the value of first party data targeting on TV.
What it lacks: Big scale. It is not theoretically possible to reach 20+ million US households with an addressable TV ad. However, it is hard to cume reach, since the available addressable TV inventory within those households is still limited. However, new efforts Comcast, Charter and Sinclair-backed Smart TV-targeter Sorenson might change that.
Grade: Smoke and real Fire. This is one to be investing in, but it’s not the Holy Grail yet, and probably won’t for a long time.
4. Targeted linear TV advertising has a $100 billion dollar future. OpenAP will be its catalyst.
Credit Suisse analyst Omar Sheikh released a report two weeks ago predicting that data-targeted linear TV ads (buys based on audience and performance, not content) would represent $100 billion of spend in the US by 2030. At the same time, Turner, Viacom and Fox all announced the formation of OpenAP, a taxonomy and service for advertisers to make coordinated, audience-based buys across all of their cable networks.
Big question: Is the TV world ready to truly embrace buying and selling ads based on data-defined audiences and/or sales performance?
What it does well: Early entrants into this sector, AT&T AdWorks, Simulmedia and Cadent have proven out the fact that audience-based buys can be win-win for both buyers and sellers (better ROI & higher CPM’s). These results have mirrored by network-specific initiatives over the past two years at NBCU, Turner, Viacom and others.
What it lacks: Too fragmented. While multi-network aggregators have delivered lots of scale, the network-driven efforts were limited to their own inventory, and everybody has their own audience definitions and performance metrics.
Grade: Smoke and Fire. With OpenAP, and NBCU’s commitment to hold $1 billion of inventory for audience-based buying, audience-based TV ads are now here at real scale.
5. Fraud, measurement and safety fears hang over ad-supported digital video. Fearful advertisers will retreat with their dollars back to TV.
The past few months have brought us no shortage of stories about challenges in the digital video ad world, from fraud and viewability to lack of independent measurement to content that is unsafe for brands.
Big question: Will fear of the unknown in digital video – coupled with fear about the growing power of the Google/Facebook duopoly – cause advertisers to pull big chunks of their digital ad spend back to TV?
What it does well: Video is the most powerful form of advertising. Digital video ads deliver great targeting and reaches hard-to-find audiences. It is growing really, really fast.
What it lacks: Digital video isn’t as predictable as TV, nor are its measurement metrics as stable and accepted. Its content can put folks on edge sometimes.
Grade: Smoke and Fire. Digital video is here to stay, and big players like YouTube and Facebook will certainly be long-term dominant players. This is a good time for advertisers to play tough over content safety and measurement issues, but only to build more sustainable long-term partnerships.
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