Has The Day Of The Single-Line National TV Budget Passed?

Since the advent of digital media, there has almost always been more than one budget line devoted to “digital.” At first there might have been a simple single line for banners, but that didn’t last very long. Soon came a line item for search marketing, then Search Engine Optimization, Rich Media, Video, Social, Native and now Programmatic (which can be split even further into display, video and native!).

In the digital world, it is not uncommon for separate agencies or departments to plan and execute those myriad line items. It has led to so many categories within categories that it boggles the mind. Some larger agency companies can say they handle it all, but are they really best-in-class at everything? And isn’t that what clients are looking for?

Meanwhile, TV has remained relatively the same. Just one lonely single line meant to deliver national GRPs. Sure, we spiced it up with DR and syndication now and then, but that’s about as exotic as we got. One could argue that broadcast and cable need different lines, but who really thinks that way anymore? I might grant you the difficult decisions regarding the amount to spend upfront vs. the scatter market, but that’s all still just TV.



We all know that television is being driven down the same data path as digital. The entire marketing world acknowledges that as truth. Why, then, are marketers relying on and expecting their traditional TV planners and buyers to be expert in all things new in television such as audience buying, programmatic, and business outcomes as a success metric? We didn’t expect those same agency organizations to handle every digital detail every time. Yet marketers do expect their lone TV-buying agency to adapt, test and analyze new advances in television. There are some pretty compelling reasons for that ($70 billion+ reasons) as the economics of the ad agency world still brew compensation in bulk. With advances in the TV world, new technology is becoming mainstream. Many marketers are beginning to beg for TV to be as accountable as digital. Traditionally planned and purchased TV can deliver media based measurements all day (GRPs, CPMs) but they struggle in the digitally influenced concept of return on ad spend.

Am I advocating data-driven buying specialty shops? Maybe, and maybe not. In the very least, marketers could make a start by separating their budgets for traditionally planned contextually delivered TV and data enhanced TV efforts. Once that first step is made, then agents and clients can determine the real value in advanced TV and how it will fit into future programs. Will that breed a subcategory of TV? That remains to be seen.

The complexity of a data-driven TV world is just beginning to show benefits to those advertisers who are looking for business outcomes -- vs. just ad exposure -- and the new efficiencies they bring. Marketers should embrace the fact that traditional TV won’t fit in a business outcome-driven world. The new TV budget decision shouldn’t be how much to commit in the upfront and what to save for scatter. It should be how much to devote to data driven, ROI-focused TV and what to save for contextual.

15 comments about "Has The Day Of The Single-Line National TV Budget Passed?".
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  1. Ed Papazian from Media Dynamics Inc, June 4, 2015 at 8:33 a.m.

    Joe, perhaps we should wait until the "data driven" and "audience buying" systems that herald the "new" approach to TV buying are actually a proven reality, not merely speculation and theory.

    Take the "data driven" part. What data are we talking about----big data? And how is this data used? Or, better yet, are set usage indices merged with "third party" marketing info, then mashed onto Nilesen ratings, really a vast improvement over what is now in place? And what happens if the sellers don't cooperate---since they can't afford to let their "audience" inventory be cherry picked---at the lowest CPM---- by "programatic trading desks" without sacrificing their profits?

    I think that in the long run, TV will adapt to the practical realities it faces in many ways, but it's not going to be driven into a digital selling mode----or any of its main features----until these are shown to represent a real improvement, not only for the buyer but also for the seller.

  2. Neil Ascher from The Midas Exchange, June 4, 2015 at 9:57 a.m.

    Ed, I think you hit the nail on the head -- "what happens if sellers don't cooperate?"  Planners have always been able to link product purchase behavior to TV viewing using MRI & Simmons.  That is how most buying guideline documents are drafted.  Granted, that data may not be as fresh as the loyalty card actual purchase data and other sources now in use.  The reality is that vendors have never been willing to allow buyers to cherry-pick only the inventory that they want, or have done so with a HUGE premimum attached.

  3. Ed Papazian from Media Dynamics Inc, June 4, 2015 at 10:23 a.m.

    Thanks Neil.

    Another point that the advocates of "audience buying" seem to miss in this ongoing debate is the fact that most of the time advertisers would be wanting the same shows. If one looks at the available data----and there is tons of it-----aside from certain very youthful and very older skewed products, plus some with pronounced ethnic slants, most of the time the same shows will index high, and low. This is because the main driver, in most cases, is income. Invariably, TV shows with a moderate or stronger tilt towards upscale audiences index higher than the norm for products. As a result, the "programmatic trading desks" ----all other factors held equal---will always try to buy the same shows---which, of course, is an impossibility for the sellers. The sellers must move 95%+ of their commercial time across their entire schedule, hence they will not even provide ad rates for individual shows---exceptions aside---and will, instead, provide "package deals, involving numerous placements in various shows---the good, the bad and the ugly. So how are advertisers going to reap the "unheard of targeting efficiencies" they are being promised under these conditions? Answer: they ain't.

  4. Joe Germscheid from JG, June 4, 2015 at 11:03 a.m.

    Neil and Ed, thanks for your comments. It’s my opinion that the reality of audience targeting using actual set top box viewing data, MRI and Nielsen is already here. And sellers are already embracing it. The deeper dive the data shows us is valuable to the sellers in that they can better monetize their inventory so they don’t need to drop their CPMs in a programmatic marketplace. New definitions of premium are already beginning to take root. NBCU and Turner proved that in their upfronts this year by starting to sell audiences themselves. 

  5. Ed Papazian from Media Dynamics Inc, June 4, 2015 at 12:28 p.m.

    Joe, it is strange indeed that the supposed "TV audience buying" and "programmatic" selling that you contend is already in place and being accepted by advertisers and sellers never gets very well defined as to its extent and how the sellers are cooperating. So far, we are talking about experiments or "computer-assisted" buys which, in many cases seem to involve surpluss ad time in a few marginal programs or on only a handful of low rated channels.

    I understand why advocates of the upcoming "revolution" would sieze upon these as portents of a major reshaping of TV buying and selling but, to me, they simply represent a willingness by some parties to see how a new system might work and test the mechanics. Which is fine. In fact, were I at a major advertiser or media seller I would probably order my people to look into it, perhaps test it, and let me know what the practical applications are and what benefits might be attained----providing the "other side" played by the same rules. It is not at all a "sure thing" that all of this will pan out the way it's being touted....but let's see.

  6. Ed Papazian from Media Dynamics Inc, June 4, 2015 at 1:07 p.m.

    I think I should add a bit more to this discussion.

    Take the definition of "audience buying". As I understand it, this is supposed to be a major innovation and something very different from what is now available.

    OK. So let's take what is now available as a basis for comparison. If an advertiser wanted to, his agency buyers could use MRI data---which has been around for decades----and get a single source fix on a show by show basis indicating what products those viewers bought or used, how often they use the products, and what brands they prefer. So a tooth paste advertiser might find that Show A indexes at 108 relative to the norm in "targeting" heavy toothpaste users while Show B indexes at 98. Such indices could be applied to Nielsen ratings for the appropriate demo ( adults aged 18-54, for example ) and--voila---you get an indication of how "valuable each show's audience is for this advertiser. Apply CPMs and make your buy, etc.

    Now we turn to "audience buying". Here, we take a "big data" set-top-box panel, with several million homes and determine a set usage rating for Show A and B. We then look at another source that measures household purchase of toothpaste and calibrate this so we can profile heavy user homes---by geography, age of househoild head, income, etc. Then we merge the two findings, via ascription, to create an estimate of how many of Show A's big data tune-in homes are probably heavy toothpaste users. This allows us to create a set usage---not a viewer--index that credits Show A with a 106 index  and Show B with a 103 index---though we don't know who in the home watched the show. This index is then applied to the Nielsen ratings, just as we did, earlier, to tell us how "valuable" each show's "audience is to the advertiser.

    My question is simply this. What's so different about these approaches? Is it because "audience buying" is based on electronic data manupulation while what we now have is based on human responses? And how do we reconcile the critical flaw in the "big data" concept---the absence of viewer information?

  7. Ed Papazian from Media Dynamics Inc, June 4, 2015 at 1:17 p.m.

    One other point.

    I assume that my comments, above, raise the perfectly fair question---if single source usage and viewing data has long been available for most nationally aired TV shows, why hasn't this been used, rather than age/sex demos in TV buys?

    Now, that's a fair question. But there is a reason. And it actually makes sense.

    Simply put, when an advertiser makes a multi-brand corporate upfront buy, the umbrella demo---adukts 18-49, women 25-54, etc.--- is not really a targeting indicator as all of the brands' audience requirements are merged together as if they are one big brand. What marketing indices would one use in such a situation---an average for all brands, no matter how different they are? Rather, it's a way for the buyer and seller to agree on a single, "optimizing" tonnage yardstick as the basis for corporate-wide audience guarantees. The time when brand by brand product use/buying data of the sort MRI provides, is best employed is later, when the spoils of the corporate buy are allocated to each brand.

  8. Doug Garnett from Protonik, LLC, June 4, 2015 at 4:57 p.m.

    Ed Papazian nails one of the two big mis-directions used to sell "programmatic". Or let me ask it another way:

    Traditional buying has targeted audiences according to regionality and programming which reflects their interests. 

    Programmatic promises to target via a different approach --- via "behavioral" data. We're told this is "much better".

    If every behavior was knowable through data...perhaps. Except, only exceptionally limited behavioral data is available. Let's consider behavioral data online. I go to Amazon and search for a Keurig machine. Then buy it. But, advertisers learn that I searched (once) for a Keurig machine on Amazon. So I'm pummelled now with advertisements for Keurig and for coffee...for months...for months AFTER I made my purchase.

    And, of course, they area wasting their money pummeling me with ads because I've already purchased. A year after getting a LifeLock membership, I get perhaps 50 to 60 LifeLock banner ads a month.

    Could behavioral data be better? That's what we'll be told. In truth, I think this is a systemic problem - the data can NEVER live up to whats promised for it.

    So bottom line seems to be that there's no target market advantage for programmatic. Unless you're a company promoting programmatic whose target is to get rich quick and get out of the market.

  9. Joe Germscheid from JG, June 4, 2015 at 7:08 p.m.

    Thanks for bringing up all the interesting points. I’d like to share some opinions on a few individually. 

    The advantage of targeting audiences over demographics is that by aiming for a specifically defined group (In Ed’s example it was heavy product users) one is able to reach that audience more effectively and efficiently. The efficiency comes in reducing impressions (waste) to those outside the defined group. That saves clients real money. The effectiveness is proven by watching business outcomes. That makes clients real money. Achieving media output goals with demographic targets doesn’t take those two things into account.

    Behavioral targeting or data targeting is simply a means to an end. The means can change (different data sets) but the end stays the same; more cost efficient sales for the client. When the data you are using is bad or old (as in Doug’s example) the promise of increased sales isn’t met. When the data used is as important as client business outcomes, you either live up to the promise, or the client will find another solution that does.

  10. Ed Papazian from Media Dynamics Inc, June 4, 2015 at 7:44 p.m.

    Joe, I appreciate your point of view, however, I must reply that the term "audience buying" as used in this discussion implies that the current way TV time is bought has nothing to do with audience. Actually all you are advocating is the substitution of a product user/buying index for age/sex demos---both being different ways to define the value---or presumed value---of the "audience".

    Another point is worth repeating. Appoximately 75% of national TV time is bought in the upfront----not brand by brand ---but, in almost all cases, on a collective basis. In other words a 15-brand upfront buy is treated as a single large brand, with a single age/sex demo used a "currency", albeit modified slightly in many buys by an index representing the "engagement" level of the audience. If you switch to a different product use/purchase metric for each brand you will find that the sellers won't guarantee audience on so many different variables. Therefore, to get the corporate GRP "tonnage" guaranteed, you will have to pick one number per show for the entire buy. What will that be--an average product usage/buyer index for all of the corporation's brands combined? That would probably result in mushy show by show indicies---all hovering around 100, with slight variations up and down---thereby defeating the purpose of the exercise.

    The alternative would be to drop the upfront system entirely and let each brand go its own way. Again, I doubt that the sellers will guarantee audience delivery on so many variables. Worse, from the advertisers' standpoint, if each brand bought its own time, the sellers would have a field day with their pricing and packaging and could maneuver many brands into paying more---not less----for their TV time, without any tangible targeting benefit as compensation.

  11. Doug Garnett from Protonik, LLC, June 5, 2015 at 6:01 p.m.

    Joe - Your note brings up another fallacy in the idea of targeting. When I listen to media buyers and marketers talk, you'd think targeting was a 100% accuracy game. But it's not.
    Marketers are exceptionally lucky if any more than 50% of the purchases that result from an advertisement are from people within their target market. 
    So, in reality, having the laser-like ability to pick who sees the ad just might destroy your company.
    So you worry about people seeing the ads who aren't in the target market. But for decades we've known that targets are only a guide - not an absolute. 
    My guess is we will learn that the most effective TV has already been being purchased and there's nothing to be gained (and a lot to lose) with programmatic. Why? Because by finding people by interest, you're also reaching those outside your target description who are likely to become purchasers of your products/services.

  12. Joe Germscheid from JG, June 6, 2015 at 1:42 p.m.

    Thanks Doug. You bring up great points that you're probably surprised I agree with.

    Personally, I dont' think that programmatic and audience targeting will ever be 100% of TV budgets. That's the one point that everyone anxious about programmatic assumes. This isn't an all or nothing situation. For all the great points about expanding the customoer base of a brand you brought up. Especially at this point in time, precision targeting should be a compliment to a contextually purchased base plan. As Ed points out, 75% of the prgramming is now sold and purchased upfront. As long as pop culture drives TV audeinces there will be a finite marketplace for the best programming as defined by that marketplace. The upfront will never go away completely.

    But, many in the marketplace believe that there is a better way to accumulate impressions over the traditional packaging behaviors of traditional buying. In order to secure great programming, we are forced to compromise and accept programs we don't value as much or at all. What if that non-premium programming could be prioritized and purchased because we know that it does have value for that one particular client? What if we could prove that an important audience does watch that programming and when they see our ads good business results happen? We might also discover that we can find niche audiences and show them different creative that works better to raise client revenue. All those things would be a great improvement over how the majority of the TV marketplace works today.

    Data driven TV is here. It may be a small sized business today, but once marketers discover that they can prove out ROI from TV the same way they have been doing it with digital, many of us believe that budgets will grow and it will benefit all of the industry.

  13. Ed Papazian from Media Dynamics Inc, June 6, 2015 at 5:04 p.m.

    Joe, as I have been pointing out, and I mean this in a constructive way, the broadcast networks have no choice but to package all of their prime time shows together---as well as those in other dayparts, though with somewhat less rigidity---as this is the only way they can get maximum dollar ad revenues for their many "bombs" and so-so shows. If they unbundled their schedules, selling only the "premium" shows in high CPM packages but allowing buyers to cherry-pick the "non-premium" shows at the lowest possible CPMs, they would lose revenue.

    I should also note that all prime time shows are considered "premium", especially the new ones launched each season, which are bought as part of packages before it is known for sure how they will perform. When a show gets unusually low ratings, it is dropped very quickly with another substituted---again, in the hope that the new program will be an improvement. Also, just because one show garners an average minute tune-in of 10% and is considered a "hit" while another gets a 3% rating and is relegated to the dust heap as a "flop" , this doesn't make the high rated show a better vehicle for an advertiser. The low rated entry may target younger, affluent viewers---just not pull enough of them---while the hit may reach mostly adults aged 55+. Other variables include viewer attentiveness or involvement. The hit show may be a reality-type variety show which is less engaging to its audience than the flop, if the latter is a drama. etc. etc.

    My basic point is that there is a lot of theorizing going on about "programmatic" buying for TV and "audience buying" which should be tempered by a careful study of what is actually at play in the media planning and buying of TV and how the buyers and sellers interact---the trade-offs, the way upfront buys are orchestrated, how the audience data and other research is utilized, etc. As it happens, we are about to put out a report along these lines---timed for the upcoming upfront----which explains how the system developed and how it operates, including some critiques of the current buying process and sugestions about reforming it. You might want to subscribe to this report. I'm sure you will find it very interesting.

  14. John Grono from GAP Research, July 6, 2015 at 9:32 a.m.

    Hi Doug and Ed.

    Just caught up on this thread after moving house.   Collectively you have nailed it.

    'Programmatic' (how I loathe that work now - it has assumed the mantle of 'engagement') is totally dependent on the quality and quantity of content made available.  At all times the seller controls supply with the goal of having it slightly lower than demand.

    In a programmatic bid system it is not unusual for a TV spot in a premium programme to sell for more than ratecard.   You can be sure that sellers will be monitoring that situation and doing all they can to make sure it happens often.

    Where I see 'programatic' (automated buying) having a 'value' is in a schedule of (say) 100 GRPs a week every second week with the goal of maximising (say) 3+ reach over (say) six weeks.   The buyer constructs the 'core' of the buy using MRI data, client data, sales data, geo-data and whatever they can get their hands on and locks it away well before airtime.  This would be something like one-third of the buy in the big rating programmes.   The automated buying then kicks in and 'back-fills' with the remaining inventory selecting programmes (within the 100 GRP limit) that maximise the 3+ reach goal.   Back to the days of the old 'Optimiser' but with a trading back-end on it.


  15. Ed Papazian from Media Dynamics Inc, July 6, 2015 at 12:02 p.m.

    Exactly, John.  "Programmatic'" or some other computerized system, is fine for TV scheduling refinements or allocating spots to brands once a corporate buy goes down----but not for the buying, itself.

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