Since I spend a lot of time in the world of targeted linear TV advertising, a lot of folks have asked me for my views on this event, so I thought it would be fun to use this column to unpack the report for folks who haven’t had a chance to read its 100+ pages. Here are some of its highlights:
It’s a big call, well-researched and supported. While other analysts in the past have written about the potential of various advanced TV ad technologies to help TV companies better defend their market share in the face of growing competition from digital advertising, Sheikh’s report is the first to dig deeply into one of the techniques -- data-targeted linear TV ads -- and analyze its specific impact on the value that TV companies can potentially unlock from their audiences and ad inventory.
For support, he cites lots of respected industry sources as well as proprietary research fielded directly from the CMOs of close to 100 advertisers representing $21 billion in annual marketing spend.
Most of the $100 growth in TV ads comes from call-to-action advertising. The world of advertising is becoming increasingly performance-focused, as data-driven digital systems both make it now possible for all media to be performance-measured, and digital marketing channels like Google and Facebook make targeting and ROI reporting table stakes to grow budget from advertisers. For decades, industry visionaries like Jack Myers have predicted that media companies would eventually add better closed-loop capabilities and take share from “below the line” marketing channels like telemarketing and promotion. Sheikh says that time is now upon us.
Development of targeted TV ad platforms and OpenAP catalyzing the market. Sheikh’s report recognizes that very little is spent today on targeted linear TV ads, but many marketers are ready to jump in. He references interviews with CMOs who reveal that they spend virtually nothing on this today, but 40% intend to try it over the next year.
He points to the development of targeted TV ad platforms and the announcement of OpenAP, particularly, as critical catalysts for jump-starting the market now. OpenAP announced several weeks ago, is a consortium created by Turner, Fox and Viacom to facilitate cross-network audience-based TV ad buys
He didn’t use the word programmatic. This wasn’t about trying to shoe-horn a digital square peg into a round hole, which so many have tried to do by hoping that programmatic digital ad systems would suddenly open up TV inventory for last-minute buying at cheap rates.
Nope. This is all about applying deep data and predictive analytics to make TV ad buys as predictable, provable, performant and integrated into the marketer's enterprise as search and social ads are today.
Should be lots of mergers & acquisitions. It’s not surprising that a bank analyst would predict that technology disruption would drive more M&A, though it certainly makes sense here. Media owners will need to be part of companies that have lots of tech, data and ad insertion capabilities to be able to exploit this $100 billion annual opportunity. That certainly seems consistent with AT&T buying Time Warner. It certainly makes sense that we’ll see more deals like that.
do you think? Want to decide for yourself whether there's a $100 billion annual opportunity in targeted TV ads in
U.S.? Read the report for yourself.