Empower MediaMarketing’s genuine commitment to transparency in all aspects of its operations and business relationships was a primary factor in its being chosen as MediaPost’s 2016 Media Agency of the Year.
That guiding philosophy was evident in the combination of optimism and constructive criticism expressed by Empower’s VP, offline investment and activation, Michele Toller, in a programmatic TV discussion with ABI this week.
Some observations that Toller shared as part of a new BIA/Kelsey report on the 2017 outlook for programmatic in local TV served as a jumping-off point for our discussion. (The report will be available in the organization’s online store starting Jan. 23.)
Clients Eager To Leverage PTV
How important is PTV to Toller’s clients at present?
It’s “another tool in the toolbox,” and a complement to direct television buying, but it is given “serious consideration” for all campaigns, she reports.
Clients in the financial and healthcare industries have been most active in employing PTV to date. “And for most of my clients, it represents a small percentage of their media investment — single digits,” she says. “But as programmatic grows and there’s more scale in both local and national, I think it’s clear that investment will grow exponentially.”
Not surprisingly, she confirms that the big allure for clients is being able to leverage consumer data to identify and reach the best prospects most efficiently. That includes both first-party and third party data, and testing new data sets along with “looking at using automation to find ways to combine data sets that we haven’t been able to combine in the past.”
One promising avenue is using data from a client’s CRM platform to model an audience, then purchasing media across a portfolio of networks with the highest concentrations of that audience. “That’s definitely new to the linear TV space,” she notes.
Toller reports that programmatic can sometimes increase the density of the desired target audience by as much as 33% compared to a nonprogrammatic TV buying approach.
Further, “we’ve had instances where, when we’ve compared a campaign as executed in programmatic versus a traditional buy, the ROI for programmatic has been two times higher,” she says. In other words, despite the higher upfront cost, programmatic’s effective CPM can indeed be more efficient. “It’s great to shift the focus from counting the people reached to reaching the people that count,” she declares.
To date, her clients’ use of programmatic in the OTT environment has been more limited. “There’s a lot to be worked out there,” Toller notes, including ensuring that the rights have been secured to stream a piece of advertising creative in digital, as well as to run it in broadcast or cable. However, she adds that such concerns are being addressed as these channels evolve. “It’s a very interesting space, and we’re watching it closely to see how it’s going to take off.”
Comparability, Scalability And Other Challenges
“If you find something that seems to be working very well, that’s yielding strong ROI for a client — whether it’s the data set or the platform, or a combination of factors — then you of course want to scale that up,” Toller says. “But everybody seems to have a different way of approaching modeling and targeting. Everyone has their own ‘secret sauce’ for yielding the best performance for the client. So doing valid comparisons of performance, and understanding why one way worked better than another, can be a challenge for agencies and clients.”
Looking at the broader picture, Toller stresses that the lack of consistent metrics and a common currency “within and across” channels and media is one of the biggest obstacles to more mainstream adoption of programmatic practices in television.
While she doesn’t expect overnight change, she says she looks forward to the time when systems and practices will be streamlined enough to allow for buying on a performance basis, meaning paying only for impressions actually delivered.
“If we can use the technology coming on in the programmatic space that allows for monitoring more or less in real time, we can also get away from makegoods and all of the antiquated practices that are a huge drain on resources on both sides,” she adds.
A longer-term wish: “If someone could come up with a solution for every client to be able to tie every impression back to some type of an action, that would be the Holy Grail.”
The Mandate For Change
Empower did “quite a few” programmatic deals for clients at 2016’s upfronts, but such deals will likely continue to grow incrementally each year in the industry, rather than “leap from 10% to 80% of deals in one year,” she says — much as she’s hoping for much more widespread PTV adoption within just two or three years.
“Marketers are just not in a position where they can continue to commit to four quarters of advertising and be tied to 70% of that,” Toller stresses. “Everyone now is held to EBITDA or ROI or other KPIs, and when you have these antiquated models, marketers have a very hard time operating and being able to react to the business under those circumstances.”
While she’s pleased that some television network groups are beginning to offer enriched-data options, lingering resistance to change is without question one key obstacle to faster PTV adoption, Toller says.
One factor behind reluctance to move away from the predictable, largely controllable GRP-based business model, she acknowledges, is that enabling different advertisers to target varying, data-enriched segments “makes it very difficult for the sellers to manage their inventories and project revenue, because they don’t know how many impressions they have to sell in the marketplace.”
Still, she says, such reservations and obstacles must be overcome.
“Many [sellers] I’ve spoken with say, ‘We’re heavily sold, and we’ve had quarter over quarter ratings growth, and there’s no need for us to move into programmatic,’” Toller notes. “But that has nothing to do with why you would venture into programmatic. You would do that to give your clients what they want, which is the ability to use different data sets to minimize the waste in the audiences they’re reaching, to improve their ROI. Those groups that are starting to move in that direction are putting themselves in a good place to gain share from networks that aren’t. And those that aren’t should remember that there are many examples of industries that were undone by thinking that they didn’t need to change.”
She’s quick to add that resistance to change is also common within agencies and present to some extent even in client organizations.
“The key parties need to collaborate to identify and quell these fears,” she says. “They also need to work together to remove barriers such as siloed organizational structures, sales-channel conflicts, and resistance to adopting new targeting, measurement and currency standards. At the end of the day, we’re all buying content. So we need to align around content, not get hung up on where and how it’s delivered.
“We also need to standardize API specs, and create a common nomenclature,” Toller adds. “We need partners to be forthright about fees and inventory sources. And we need to learn from what’s happened in the digital space. We should apply what’s worked there to the video space and avoid repeating what hasn’t worked.”