What If We Judged Traditional TV Ad Buying by Emerging T/V Standards?

My two most recent Online Video Insider pieces focused on the world of media exchanges/RTB (real-time bidding/buying), sometimes called “programmatic buying.”  The first is a primer detailing what this is, while the second provides an analysis of what this means for T/V (television/video).

This will look at the glossary of new language and standards programmatic buying uses to describe and evaluate online video advertising capabilities.  If these concepts were applied to traditional, linear TV, what would it tell us? Here are four to begin with:

1)   Viewability

Online/OTT (Over-The-Top) Video – In the online world, there have been cases where video ads have been unethically sold to advertisers as “click-to-play.” In reality, some of this inventory has run as “auto-play” and “below the fold,” where the ad is likely never seen (sometimes called fake pre-roll).  This has led to increased demands by advertisers for “viewable” ads that only run as “click-to-play” and/or “above the fold.”

Linear Television – Traditional TV CPMs (costs-per-thousand) have always been based on “viewing opportunity.” Since advertising audiences are measured by sample-based program ratings that stand in for advertising viewers, there has been no way to determine real ad viewability.  Advertisers continue buying, knowing that a portion of their advertising is “wasted.” With 50%+ U.S. household penetration of DVRs and technology-aided commercial avoidance at an all time high, unmeasurable linear television viewability pales when compared with online video and VOD, which are inventing an entirely new performance criteria for T/V.

2)   Ad Completions

 

Online/OTT Video – The ability exists online to track and report on ads that have been completely (vs. partially) viewed. As with search vs. display ads, real-time data feedback like this creates a higher-value option for advertisers and content providers alike.

Linear Television – Dodging advertiser requests over the years for unit-by-unit commercial ratings and continuing to sell based on the notion that program ratings are a reasonable surrogate for commercial ratings, traditional TV networks and distributors have maintained the status quo despite the ready ad-avoidance technology viewers have in hand (DVR, second and third screen devices, etc.).  Linear advertisers don’t know if their ads are seen, let alone seen to completion.

3)   Cross-Platform GRPs/Impressions

 

Online/OTT Video – Digital measurements like CPM, CPV (cost-per-view), CPCV (cost-per-completed-view), CPE (cost-per-engagement) and CPC (cost-per-click) along with lower ad-loads than linear TV provide advertisers with more accountability, visibility and reliability.

Linear Television – On the surface, linear TV CPMs are often lower than online video CPVs, and advertisers are often drawn to this lower number, even though it is based on an apples–to-oranges comparison.  Low CPMs are great until you realize they are lowered by unmeasured and unseen ads.

Both of these situations contribute to current calls for a standardized, multimedia, multiplatform video GRP definition (sometimes called digital video GRPs) that would allow buyers to compare traditional and nontraditional T/V buying options.

4)   Addressability/Targetability

Online/OTT Video – Set-top-box data, online cookies, consumer-provided information and clickstream data all allow advertisers to steer messages to those most likely to want and respond to them.  Users with no kids no longer need to watch diaper ads, nor do advertisers need to pay for those impressions.

Linear Television – Cable companies and efforts like Canoe Ventures have been talking about set-top-box addressability for some time. However, because of disparate cable/satellite system operator subscriber bases, there has yet to emerge a national clearing house for addressable linear advertising in the U.S.

Summary

Accountability, transparency, measurability and targetability are attributes online/OTT videobring to the ad-supported T/V marketplace.  It’s hard to ignore the fact that for these key advertiser criteria, traditional linear television can’t hold a candle to interactive, measurable, audience-driven VOD offerings available on multiple platforms today. These differences will only increase as the newer technologies evolve.

Traditional “closed-circuit” cable and satellite distributors should move immediately to track and report viewability through set-top-box data, expanding to other platforms with products like TV Everywhere. They won’t always have the major numbers of subscribers and advertisers they do now – all looking to them as the “easiest” way to access content and deliver advertising.  They continue to need a national clearinghouse to offer audience addressability to national advertisers.

Once online/OTT providers like Netflix, Amazon, Hulu, smart TV manufacturers and others begin to pull in bigger advertising and/or subscriber dollars, they will be able to invest further in original programming and level the playing field with cable networks for audience and ad revenues.

 T/V advertisers in the meantime would be wise to start shifting more dollars to online/VOD/OTT venues now, to learn about and join this brave new world of accountability and target-ability, and to incentivize linear television providers to compete as well.

Tags: tv, video
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1 comment about "What If We Judged Traditional TV Ad Buying by Emerging T/V Standards?".
  1. Bob Gordon from The Auto Channel , November 8, 2012 at 10:39 a.m.
    Clicked and viewed video should be priced at successful direct mail CPM's not TV CPM's. A viewer watching and auto manufacturers video on The Auto Channel should pay fairly...how bout a buck a view?