Advertisers want and need results that can be tied directly to ROI and sales. As video budgets continue to shift from TV to online, it’s about time we hold TV accountable for actual, standalone performance. But how?
In 2005, Mark Lieberman and Bill Harvey started TRA, now TiVo Research, with the promise of deterministic data based on Set Top Box (STB) information for ROI measurement. Rentrak took it to the next level with data on almost 25% of TV households. Both ventures enabled better targeting and measurement on TV using data.
However, the disconnect between the data providers and the TV buying systems coupled with the complexity of the TV delivery system – which still requires manual work, excel sheets, and fax orders – limited the ability of utilizing data for TV advertising to big brands that have the money to spend heavily on TV.
Ten years later, ROI for TV campaigns is still clearly lagging its digital video counterpart. TV advertisers that want to go beyond GRPs and measure the true ROI of their campaigns are limited to test-and-control markets, or one-off projects limited by match rates with STB data providers. This, in turn, prevents real-time campaign optimization—light years behind digital campaigns, which can render thousands of versions of videos to drive results.
Thankfully, the TV industry has started to innovate in an effort to maintain its piece of the advertising pie. Two competing technologies have emerged that can help bring TV ad buying in line with digital video buying capabilities: addressable TV and programmatic TV. Michael Kubin, EVP of Invidi, expertly described the differences between the two. While each has its own limitations, they both get TV closer to digital video buying.
While allowing for the most granular – household level – targeting and measurement, addressable TV suffers from limited coverage of about 25% of US HHs and still requires a manual buying process. The efficiency of programmatic TV led agencies to adopt programmatic buying, and they will do so in TV.
Worried that programmatic will drive prices to the bottom, the seller side put limitations on programmatic TV that prevent it from reaching its full potential.
Both technologies will improve in the next couple of years: The scale of addressable TV will increase to cover most MSOs, and the buying process will become more programmatic. Simultaneously, programmatic TV will integrate more data and improve targeting resolution, and TV sellers will learn to take advantage – similar to what happened in the digital world.
ROI from TV ad spend can be scaled by combining all of the TV advertising solutions: addressable, programmatic, and connected, with data and measurement solutions. This combination can help advertisers get beyond reach and frequency and start seeing real return on their investment—it’s about time!