• by Karlene Lukovitz  @KLmarketdaily, September 2, 2016

Television — meaning the full gamut of advanced and traditional — has never before presented such a mixed bag of complex new challenges and equally complex new opportunities, observes Maureen Bosetti, chief investment officer for Initiative.

In an interview, Audience Buying Insider asked Bosetti to share a few top-of-mind thoughts on some big subjects. Excerpts:

Can you summarize your take on the status of advanced or programmatic television?
With any new way of buying, there’s always opportunity. I think that getting access to the right inventory through more partnerships with national cable and broadcast networks is an opportunity, for instance. Right now, we’re dealing with a lot of local aggregators to access inventory for programmatic TV. Within advanced TV, as across all media platforms, we have to figure out how to aggregate and seamlessly access the inventory we need in order to get a full look at the audiences, wherever they may live. Obviously, if you don’t have access to the inventory, programmatic is not as actionable. But we’re able to use a lot of workarounds for the present. And it’s still early days. Advanced TV systems and technology, in particular, should evolve in the years ahead.

What about networks’ reluctance to make premium inventory available through programmatic? What, if anything, may change that?
Part of the problem right now is the shortage of rating points. There’s already pressure on the available inventory. Beyond that, as marketers and their agencies shift to a greater focus on strategic targets as opposed to just age and sex demos, and assuming that custom or targeted demos can be shown to be more efficient, networks should be able to justify a premium or higher unit cost on certain inventory. And being able to realize greater value on inventory should make them more open to programmatic. Of course, that will require a major shift in how networks sell their inventory. And media buyers will have to determine whether paying a premium is worth it for specific clients, given their individual KPIs and needs. 

What’s your big-picture take on the status of television as a whole?
I think the strength of [traditional] television is still very attractive for many marketers, even though it takes a lot more rating points and impressions to deliver the kind of reach that we were used to, because of the technology that’s enabled so much audience fragmentation. Are we ever going to get back to the ratings we used to have? No. Even in cable, the ratings are down 10% to 15% because the supply is shrinking, so it’s getting harder to turn to cable to get efficient rating points.

The challenge is how to create the reach we need by connecting with consumers wherever they’re watching content. We need to use online and social accessed across mobile devices, desktop and video on demand, plus advanced and traditional TV — all of these different platforms — and again, aggregate them efficiently. It’s clearly more critical than ever that we look at every screen possible for media planning and buying purposes.

That said, we also have better data, greater ability to be more targeted, and many more options and opportunities to find our consumers. So yes, it’s much more challenging, but there’s also great opportunity in the marketplace. And the data and technology will continue to improve.

Can traditional TV pricing levels continue to be sustained, given fragmentation and the long-term decline in audience? Will networks’ trend to reducing commercial loads help support the pricing levels?
Obviously, it’s a supply-and-demand marketplace, and the marketplace was actually up this year. Looking forward, in my view, it’s unlikely that the inventory supply will get larger. So the question is, how much demand will chase it?

As far as commercial loads go, the ads have increased so much over the years that it’s reached a point where it’s damaging the viewer experience. And now that the networks are up against Netflix and other ad-free platforms that viewers can watch and binge-watch whenever they choose to, the networks have been forced to take a hard look at their commercial loads. Some are reducing them [selectively] — in some cases within new, original programming.

And yes, if you want to advertise in those shows, you may have to pay a higher price because there are fewer availabilities. But whether it’s worth paying more remains to be seen. The engagement level for ads should be enhanced, but will there be more viewers?

Speaking of video on demand … Alan Wurtzel, president of research and media development at NBCUniversal, last month presented more data confirming that, in his words, delayed viewing is “the new normal.” What does that mean for media buyers?
Given the technology and apps we have at our fingertips to watch content on demand, [Initiative’s] projections for the next four to five years definitely show live TV viewership continuing to decline, and on-demand viewing continuing to increase.

What that means is that first, we have to understand that we’re dealing with different screens and experiences and behaviors, and determine whether different messages need to be created for those screens, depending on the marketer and its target audience.

We also need to understand that a lot of messages aren’t going to be seen on prime time anymore. So whether you’re a content producer or a retailer or a marketer in whatever product category, you’ll need to think about the patterns in which your target audiences are consuming content.

As media buyers, if we used to think, ‘Wednesday’s a big night’ for our client’s target audience, now we have to think, ‘Well, people may not be watching that Wednesday-night show until Friday night.’ And we’ll have to be able to measure every screen, and aggregate the eyeballs across them. That’s what Nielsen’s working on with its Total Audience Measurement system. And with video, you now have to take a holistic approach to capture all of the viewership and impressions coming from the different platforms.

What do you make of the fact that NBC, having made its Rio Olympics broadcast coverage, including prime time, available for the first time through digital streaming platforms, in the end not only saw lower overall ratings than the London Olympics, but saw the overall median age of viewers increase from 49.5 to 52.4, while realizing less than a single ratings point in lift from the digital streaming?
I was surprised that the overall viewership, and the younger viewership, wasn’t stronger. It points up that even with a major live event, it’s extremely hard to capture that younger audience’s attention. And particularly to do that with an event spanning so many days and nights. Even if you’re selling a total-audience, cross-platform package [as NBCU did], if younger audiences’ engagement is falling off, it’s going to be really hard to recapture the total audience that you had four years ago.